The Economists' Sitting Bull Weekend January 22-24, 2010

[Demeter]

It's a terrible pun, I know, and I fully expect to pay for it in several successive lives, but we are sitting (or rather, THEY are sitting) on a lot of bull out there.

The people who came to the Americas before the Europeans realized that the white men were full of shit pretty fast, but the massive differences in technology and morality were against them. And that's why we are where we are today--cornered.

So what do we know about the first Americans? They were tribal, they were diverse, they had come to realize that one must live in harmony with the earth (sometime after hunting to extinction most of the large mammals on the continent following their arrival across the Siberian landbridge, according to some theorists, but who knows if this is true?).

Our own tribal representative, AnneD, has graciously sent in some ideas to incorporate into this weekend's theme, including a joke suitable for opening the evening: (and God knows, we could use the laugh)


THE BOTTLE OF WINE
For all of us who are married, were married, wish you were married, or wish you weren't married, this is something to smile about the next time you see a bottle of wine --

Sally was driving home from one of her business trips in Northern Arizona when she saw an elderly Navajo woman walking on the side of the road.

As the trip was a long and quiet one, she stopped the car and asked the Navajo woman if she would like a ride. With a silent nod of thanks, the woman got into the car.

Resuming the journey, Sally tried in vain to make a bit of small talk with the Navajo woman. The old woman just sat silently, looking intently at everything she saw, studying every little detail, until she noticed a brown bag on the seat next to Sally.

'What's in bag?' asked the old woman.

Sally looked down at the brown bag and said, 'It's a bottle of wine. I got it for my husband.'

The Navajo woman was silent for another moment or two.
Then speaking with the quiet wisdom of an elder, she said: 'Good trade'....

[Demeter]

1. Two Banks Down at 7:45 pm

Premier American Bank, Miami Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, Miami, Florida, a newly-chartered national institution, to assume all of the deposits of Premier American Bank. Premier American Bank, N.A. is a subsidiary of Bond Street Holdings, LLC, Naples, Florida.

The four branches of Premier American Bank will reopen on Monday as branches of Premier American Bank, N.A. Depositors of Premier American Bank will automatically become depositors of Premier American Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

This evening and over the weekend, depositors of Premier American Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of September 30, 2009, Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits. Premier American Bank, N.A. did not pay the FDIC a premium for the deposits of Premier American Bank. In addition to assuming all of the deposits of the failed bank, Premier American Bank, N.A. agreed to purchase essentially all of the assets.

The FDIC and Premier American Bank, N.A. entered into a loss-share transaction on $300 million of Premier American Bank's assets. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement...As part of this transaction, the FDIC will acquire a cash participant instrument. This instrument serves as additional consideration for the transaction.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $85 million. Premier American Bank, N.A.'s acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Premier American Bank is the fifth FDIC-insured institution to fail in the nation this year, and the first in Florida. The last FDIC-insured institution closed in the state was Peoples First Community Bank, Panama City, on December 18, 2009.

Bank of Leeton, Leeton, Missouri, was closed today by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sunflower Bank, National Association, Salina, Kansas, to assume all of the deposits of Bank of Leeton...

As of December 31, 2009, Bank of Leeton had approximately $20.1 million in total assets and $20.4 million in total deposits. Sunflower Bank, N.A. will pay the FDIC a premium of 0.59 percent to assume all of the deposits of Bank of Leeton. The FDIC as receiver will retain most of the assets from Bank of Leeton for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.1 million. Sunflower Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Bank of Leeton is the sixth FDIC-insured institution to fail in the nation this year, and the first in Missouri. The last FDIC-insured institution closed in the state was Gateway Bank of St. Louis, on November 6, 2009.

[Demeter]

11. Bank #3 After 8PM

Charter Bank, Santa Fe, New Mexico, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Charter Bank, Albuquerque, New Mexico, a newly-chartered federal savings bank and a subsidiary of Beal Financial Corporation, Plano, Texas, to assume all of the deposits of Charter Bank...

As of September 30, 2009, Charter Bank had approximately $1.2 billion in total assets and $851.5 million in total deposits. Charter Bank did not pay the FDIC a premium for the deposits of Charter Bank. In addition to assuming all of the deposits of the failed bank, Charter Bank agreed to purchase essentially all of the assets.

The FDIC and Charter Bank entered into a loss-share transaction on $805.5 million of Charter Bank's assets. Charter Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $201.9 million... Charter Bank is the seventh FDIC-insured institution to fail in the nation this year, and the first in New Mexico. The last FDIC-insured institution closed in the state was Zia New Mexico Bank, Tucumcari, on April 23, 1999.

$300M? That's it?

[Demeter]

13. Hummingbird Song

http://www.youtube.com/watch?v=HbQnxls4ZB8&feature=related

[Demeter]

14. Internet Radio--FREE

http://www.gatheringofnations.com/gonradio/

[DemReadingDU]

31. 2 more banks

On Friday, January 22, 2010, Evergreen Bank, Seattle, WA was closed by the Washington Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.

more...
http://www.fdic.gov/bank/individual/failed/evergreen-wa.html


On Friday, January 22, 2010, Columbia River Bank, The Dalles, OR was closed by the Oregon Division of Finance and Corporate Securities, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.

more...
http://www.fdic.gov/bank/individual/failed/columbiariver.html

[Demeter]

34. Thanks, DRDU! From the Press Releases:

Evergreen Bank, Seattle, Washington, was closed today by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume all of the deposits of Evergreen Bank...

As of September 30, 2009, Evergreen Bank had approximately $488.5 million in total assets and $439.4 million in total deposits. Umpqua Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Evergreen Bank. In addition to assuming all of the deposits of the failed bank, Umpqua Bank agreed to purchase essentially all of the assets.

The FDIC and Umpqua Bank entered into a loss-share transaction on $379.5 million of Evergreen Bank's assets. Umpqua Bank will share in the losses on the asset pools covered under the loss-share agreement...As part of this transaction, the FDIC will acquire a cash participant instrument. This instrument serves as additional consideration for the transaction.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $64.2 million. Umpqua Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Evergreen Bank is the eighth FDIC-insured institution to fail in the nation this year, and the second in Washington. The last FDIC-insured institution closed in the state was Horizon Bank, Bellingham, on January 8, 2010.

Columbia River Bank, The Dalles, Oregon, was closed today by the Oregon Division of Finance and Corporate Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Columbia State Bank, Tacoma, Washington, to assume all of the deposits of Columbia River Bank.

The 21 branches of Columbia River Bank will reopen during their normal business hours beginning Saturday as branches of Columbia State Bank...

As of September 30, 2009, Columbia River Bank had approximately $1.1 billion in total assets and $1.0 billion in total deposits. Columbia State Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Columbia River Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.

The FDIC and Columbia State Bank entered into a loss-share transaction on $697.4 million of Columbia River Bank's assets. Columbia State Bank will share in the losses on the asset pools covered under the loss-share agreement...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $172.5 million. Columbia State Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Columbia River Bank is the ninth FDIC-insured institution to fail in the nation this year, and the first in Oregon. The last FDIC-insured institution closed in the state was Community First Bank, Prineville, on August 7, 2009.

[Demeter]

35. Total Estimated Cost Today: $531.7M

your mileage may vary

[ozymandius]

2. Guest Post: Front Running the Fed

From Naked Capitalism:

I had a friend from the old neighborhood who was the Comptroller of a major casino in Las Vegas in 1970-80s, where I also was married in 1981. Only lasting win from there, ever.

According to this dour son of Italy the way he could spot a problem, besides the more aggressive methods of observation and detection, would be to examine the returns on a table basis. In the short run they will vary, but in the longer term each game will provide a statistical return that rarely deviates from the forecast, unless someone is cheating. We would walk through the casino, and he would point to a table game and say “at the end of the month, this table will bring in xx percent.”

It was he who introduced me to Bill Friedman’s book, Casino Management, which is a useful read if you wish to learn more about that end of the speculative business from the house perspective.

Attached is some information from a reader. I cannot assess its validity, not being in the bond trading business. But it does sound like someone has tapped into the Fed’s buying plans to monetize the public debt and is front running those buys, essentially ’stealing’ money from the public. Its what they call ‘a sure thing.’

To try and figure out who might be doing it, I would look for some big player who is showing extraordinary returns on their trading, with consistent profit that is not statistically ‘normal,’ too consistently good. The problem with cheaters is that they sometimes get greedy and call attention to themselves.

In Las Vegas the bigger cheats were often taken out into the desert for further inquiry and final disposition. On Wall Street they are somewhat more arrogant and persistent, defying resolution with that ultimate defiance, “We’ll just find other ways to cheat again.”

Time for a trip to the desert?

This really sounds plausible. - ozy

[pscot]

15. I'll drive the car

Just tell me where and when.

[AnneD]

46. I have the keys to Geronimo's Cadillac

and we have a full tank.

www.youtube.com/watch?v=qMXy09pVEQY&feature=related

[Po_d Mainiac]

17. Tractor with a bucket and backhoe await the call to duty.

[Tansy_Gold]

32. I know places. . . . ..

Indeed I do

[Po_d Mainiac]

44. Pin the last dollar left in America to a cactus.....That should draw the TBTF CEO's

Chopper and Turbo from their posh offices. pscot can meet their Citations at airport.

ps.....I wanna get in a couple good swings with the "shit stick" (see 1/22 SMW for definition)
:woohoo: :woohoo:

[Hugin]

74. "A lot of holes in the desert, and a lot of problems are buried in those holes."

"Ace Rothstein: (voice-over) In Vegas, everybody's gotta watch everybody else. Since the players are looking to beat the casino, the dealers are watching the players. The box men are watching the dealers. The floor men are watching the box men. The pit bosses are watching the floor men. The shift bosses are watching the pit bosses. The casino manager is watching the shift bosses. I'm watching the casino manager. And the eye-in-the-sky is watching us all."

"Nicky Santoro: (voice-over) A lot of holes in the desert, and a lot of problems are buried in those holes. But you gotta do it right. I mean, you gotta have the hole already dug before you show up with a package in the trunk. Otherwise, you're talking about a half-hour to forty-five minutes worth of digging. And who knows who's gonna come along in that time? Pretty soon, you gotta dig a few more holes. You could be there all fuckin' night."

The Holes-in-the-Desert reference comes from the Intro Narration from the movie, Casino (1995).

More... http://www.imdb.com/title/tt0112641/quotes

[Ghost Dog]

80. Synchronously enough, we just watched that movie here last night.

It was on offer for €5.95 along with one of the local papers yesterday.

Caused me to reflect: Did in fact what one could label an "Anglo-Jewish" mafia to some degree "take over" some territory (via Wall Street) from the hitherto more dominant Italian-Irish, back there around the early 'eighties?

New York-wise, at least?

[Hugin]

84. I seem to recall something happening in that time frame...

But, I don't know enough of the details to answer your question.

[Hugin]

73. If you get a charge out of such things, here's a related book recce: The Eudaemonic Pie

The Eudaemonic Pie is a 1985 book by American author Thomas A. Bass, about a group of University of California, Santa Cruz physics graduate students (known as the Eudaemons) who in the late 1970s and early 1980s designed and employed miniaturized computers, hidden in specially modified shoes, to help predict the outcome of casino roulette games. The players knew, presumably from the earlier work of Shannon and Thorp, that roulette wheels obey Newtonian physics, and that by capturing the state of the ball and wheel and taking into account peculiarities of the particular wheels being played they could increase their odds of selecting a winning number to gain a 44 percent advantage over the casinos.

A British edition was published under the title The Newtonian Casino.

The major players in The Eudaemonic Pie are also featured in a sequel by the same author, "The Predictors", about their subsequent careers in the world of finance.

---------------------------------------------------------------------------------------------------------------------------------------

Now, this book doesn't specifically deal with the Native American theme for this weekend, but, many of the key people in the story were from Silver City, NM. So, maybe there was an Apache influence there...

[Demeter]

3. Obama confident Bernanke will win Senate backing

http://www.marketwatch.com/story/support-for-bernanke-wavering-2010-01-22?siteid=YAHOOB

Second term as Fed chief draws opponents; Reid says he's a supporter


(WELL, THEN, BERNANKE IS TOAST. GOOD!)

President Barack Obama said Friday he's confident that Ben Bernanke will win a second term as chairman of the Federal Reserve Board, despite some concern that Democrats may withdraw their support for Bernanke -- one of the principal architects of the government's bank-bailout plan.

Obama "continues to think he is the best person for the job and will be confirmed by the United States Senate," White House spokesman Bill Burton told reporters, referring to the nation's top central banker.

Late on Friday, Bernanke picked up the key support of Senate Majority Leader Harry Reid, who had been on the fence.

Concern about Bernanke's appointment grew after Obama said Thursday that he wanted to put new restrictions on the nation's biggest banks. Obama's unexpected shift to get tough on banks, some analysts said, was a political response to the upset victory by Republican Scott Brown in the Massachusetts special election for Senate.

Analysts who follow the goings-on in Washington for Wall Street still are betting that Bernanke will win reconfirmation.

"I don't think this (Bernanke vote) is the place where you are going to see a big shift in the wake of Massachusetts," said Andy Laperriere, managing director at International Strategy and Investment Group in Washington.

Under Senate rules, a filibuster vote, requiring 60 senators to limit debate on the nomination, would come two calendar days after a so-called cloture motion is filed.

That would be the key vote for Bernanke. A final vote, following up to 30 hours of debate, requires a simple majority.

Sen. Judd Gregg, a key Bernanke supporter, said he believes Bernanke has the 60 votes sewn up.

"There are certainly the votes to overcome any sort of filibuster," said Gregg R-N.H., in an interview on Bloomberg television.

Bernanke's term as Fed chairman expires on Jan. 31.

Renomination status engenders concern

There were reports on Tuesday that Majority Leader Reid of Nevada was shortly going to file the cloture motion on Bernanke's nomination, and possibly hold the final vote this week.

But by Friday afternoon that motion hadn't been filed. Reid's office denied that it ever intended to do so and that therefore it wasn't late.

Reid has been hostile in the past toward the Fed. He once called Alan Greenspan, Bernanke's predecessor, "a political hack." But Reid issued a statement after the market closed on Friday saying he would vote to confirm Bernanke.

Dan Greenhaus, chief economic strategist, Miller Tabak & Co., said perceptions of Bernanke's political perils are "another piece of uncertainty in an already uncertain market."

"But at this point, it's not taken very seriously and people think it's pretty likely he'll get approved," Greenhaus said. "But there's a growing sense in the opposition that there's political gains to be made from the situation," coming in the wake of the Massachusetts vote and Obama's new bank plan.

Analysts have long predicted Bernanke's renomination would have a hard time on the Senate floor. Laperriere said Bernanke is likely to receive the most "no" votes that a Fed chairman has ever received.

Sixteen voted "no" in the Senate on Paul Volcker's reappointment as Fed chairman in 1984. That was during a period of double-digit interest rates and on the heels of a recession.

Bernanke received seven "no" votes when the Senate Banking Committee recently voted to send the nomination to the Senate floor.

In this atmosphere of heightened scrutiny, two more liberal Democrats -- Sens. Barbara Boxer of California and Russ Feingold of Wisconsin -- announced Friday they would oppose Bernanke's nomination. Both Boxer and Feingold are up for re-election in November.

"It is time for a change -- it is time for Main Street to have a champion at the Fed," Boxer said in a statement.

The opposition to Bernanke has been led by Sen. Bernie Sanders, the socialist independent from Vermont, and by Republican Sens. Jim Bunning of Kentucky, Jim DeMint of South Carolina and David Vitter of Louisiana.

In a note, Sanders said that many Democrats see the Massachusetts election "as a wake-up call."

"There is a growing understanding that our economy is in severe distress, a greater appreciation that people are disgusted with the never-ending greed on Wall Street, and a better recognition that we need a new direction at the Fed," he said.

Bernanke received three votes from Republicans on the Senate Banking panel.

If Bernanke isn't confirmed by Jan. 31, it's unclear who would run the Fed or the Federal Open Market Committee.

Under Fed rules, the vice chairman -- currently Donald Kohn -- assumes power in the "absence" of the chairman.

However, Alan Greenspan continued as Fed chairman in 1996 long after his official term had ended while the Senate waited to vote on his confirmation.

Bernanke's separate term of serving on the Fed's board isn't at stake; it lasts until 2020. Bernanke, a Republican, was named Fed chairman by President George W. Bush.

Senate Banking Chairman Christopher Dodd, D-Conn., said rejecting Bernanke would be the "worst signal to the markets."

[ozymandius]

7. I think Obama said the same about Coakley.

Obama needs to be careful about cultivating the Bush-era "kiss of death".

[Demeter]

8. I Think Michelle or Somebody Ought to Invest in a Clue Stick

and apply it "liberally" on the members of this Administration. After all, if torture is legal, beating some sense into idiots ought to be legal, too.



I googled Clue Stick, and this came up.

[Demeter]

4. Google founders to cut stake by selling $5.5 billion in stock

http://www.marketwatch.com/story/google-co-founders-to-sell-55-bln-in-stock-2010-01-22?siteid=YAHOOB

Google Inc. co-founders Sergey Brin and Larry Page, who still own nearly one-fifth of the Internet giant, disclosed Friday that they intend to significantly reduce their stake by selling roughly $5.5 billion worth of stock over five years.

The sales are significant, because they would effectively eliminate Brin and Page's control of their company by cutting their collective voting power below 50%. Still, the 48% voting power that the co-founders' would retain following the sales nonetheless constitutes a formidable position of influence.

In a regulatory filing with the Securities & Exchange Commission, Brin and Page, who started Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 545.30, -4.71, -0.86%) as graduate students at Stanford University, disclosed that under a five-year "diversification plan" adopted in November, they'll be selling 5 million shares each.

Brin and Page currently own roughly 57.7 million shares of common stock in Google, or about 18% of its outstanding capital stock. Their diversification plan is intended "to allow Larry and Sergey to sell a portion of their Google stock over time as part of their respective long-term strategies for individual asset diversification and liquidity," according to the regulatory filing.

At Google's closing stock price of $550.01 on Friday, the co-founders' sale of stock would result in proceeds of roughly $2.75 billion each.

Brin and Page have maintained significant ownership stakes in Google, while also relying on a dual-class stock structure at the company that currently grants them about 59% of the voting power of the company's outstanding capital stock.

After their planned five years of stock sales, their voting power would be reduced to roughly 48%, according to the regulatory filing.

Google shares dipped $6.47 to $545.25 in after-hours trading.

The search giant's stock price has been on a wild ride over the past two years, veering toward $250 in late 2008, before mounting a steady recovery throughout 2009.

Early last year, Google took the unusual step of resetting stock options for employees at lower prices, making it easier for them to cash in on their equity.

[Demeter]

6. INDIANS IN THE MILITARY

http://www.nativeculturelinks.com/vets.html

The native women in the military was interesting but they left out Lori Piestwa. She was killed in Iraq. In Az, they use to have a mountian named Squaw Peak-now called Peistwa Peak after Lori. When I lived in Cloudcroft, our town adopted her unit way before the war. They came up here, the kids wrote letters. Imagine our shock then they engaged in combat and we lost many of our military friend. I can never say enough good about Lori or any of my other sisters in arms when I was on active duty. We found each other quickly and shared a bond that made us closer than sisters...

DON'T FORGET the Navajo Code Talkers and Ira Hayes. Lots of Indians escaped the Rez via the military and served with honour and distinction.

Native Americans who served in the United States Marine Corps whose primary job was the transmission of secret tactical messages. Code talkers transmitted these messages over military telephone or radio communications nets using formal or informally developed codes built upon their native languages. Their service was very valuable because it enhanced the communications security of vital front line operations during World War II.

The name code talkers is strongly associated with bilingual Navajo speakers specially recruited during World War II by the Marines to serve in their standard communications units in the Pacific Theater. Code talking, however, was pioneered by Choctaw Indians serving in the U.S. Army during World War I. These soldiers are referred to as Choctaw Code Talkers.

Other Native American code talkers were used by the United States Army during World War II, using Cherokee, Choctaw and Comanche soldiers. Soldiers of Basque ancestry were used for code talking by the US Marines during World War II in areas where other Basque speakers were not expected to be operating.

http://en.wikipedia.org/wiki/Code_talker CONTAINS MANY INSTANCES OF SAME

http://www.history.navy.mil/faqs/faq61-1.htm


TIDBITS FROM ANNED

[DemReadingDU]

26. movie Windtalkers

starring Nicholas Cage, 2002

The film begins with then Corporal Joe Enders (Cage) and a platoon of his fellow Marines fighting Japanese forces on Guadalcanal in the Solomon Islands in 1943. The outnumbered Marines are killed one by one, and as Enders mourns over the body of a friend, a grenade explosion knocks Enders unconscious.

Enders is then transported to a field hospital where he is awarded the Purple Heart, before being transported to a military hospital. By mid-1944 Enders has mostly healed from his physical wounds except for troubled hearing in one ear. Considered unfit for duty unless he can pass a hearing test, a sympathetic female pharmacist's mate 2nd class helps Enders cheat to pass. Enders is promoted to sergeant and returns to active duty. Now a grim, taciturn combat veteran who is almost deaf in one ear, Enders receives a top priority assignment protecting Navajo code talker Ben Yahzee (Adam Beach). Less jaded Sergeant Ox Henderson (Christian Slater) receives a parallel assignment protecting Navajo Charlie Whitehorse (Roger Willie). They are told that the code can not fall into enemy hands, which means that if the code talker is about to be captured they are to kill him to ensure the Japanese can't break the code. Also in their squad are Pvt. Chick, who is equipped with a BAR, the easily-hyperventilating Greek-American Pvt. Pappas, Pvt. Harrigan, who is armed with a flamethrower, and Pvt. Nellie (played respectively by Noah Emmerich, Mark Ruffalo, Brian Van Holt and Martin Henderson).

more...
http://en.wikipedia.org/wiki/Windtalkers


In the close quarters and brutal fighting of the World War II Pacific Theater, the U.S. Intelligence services desperately seek a fool-proof encryption code, immune to the code breakers of the Japanese. The answer is soon discovered in the ancient language of the Navajo. Enlisted into the Marine Corps are several "Windtalkers" who are deployed to frontline areas in the Pacific, to use their language as an impossible-to-crack secret code. A drawback, however, is that the U.S. military soon puts forth a directive that the Windtalkers must never be captured alive by the enemy, so additional Marines are assigned to make certian that this directive is carried out to the letter.

more...
http://www.imdb.com/title/tt0245562/

[hamerfan]

88. Ira Hayes.

http://www.youtube.com/watch?v=NdNV9JX-Xi8

Great song, written by Peter La Farge and sung by Johnny Cash.

[KoKo]

91. Cash Out while the Gettin's Good Guys! You done Good...nothing but hard times

ahead as your Huge Business goes the way of all business when the competitors start to hit 'ya. China loss didn't help ya'....but a BIG THANKS to GOOGLE...for good while you did help what's left of our Democracy organize, searching and finding the truth in a way that could have never been done before.

Hope you guys use your "Cash Out" well. How about competing with Murdoch for a Media Empire? How about a Media Empire that tries to do good for the World! Something more INDIE?

How about it? Could you do this? You have more money than most have ever dreamed of. Use it for DEMOCRACY and FREE SPEECH for the serfs who work in America who serve the 1%...like you guys.

Come On....You can do it and make a profit on it! :party:

[ozymandius]

5. Tim Geithner's "Financial Crisis" Declassified Phone Log Released

From Zero Hedge:

Politico has obtained the phone log of conversations performed by then FRBNY President Tim Geithner during the period of the financial crisis, or specifically September 14, 2008 through the end of the year. Some of the people called include (many of them repeatedly) pretty much all the usual suspects:

• Robert Rubin
• Lloyd Blankfein
• Larry Summers
• Hank Paulson
• Jamie Dimon
• Ben Bernanke
• Dick Fuld
• Larry Fink

And also... who is the mysterious ex-Goldmanite Dan Jester and why was he, together with Hank Paulson, the first two people Tim calls the day Lehman files?

It's a long, long list of the who's who among American (Land of the Free and the Brave) banksters and snake oil salesmen.

[Demeter]

9. Round Up the Usual Suspects!

[ozymandius]

10. I think you said "usual suspects."

Or did you mean...

[DemReadingDU]

30. LOL

Who is the guy in the first picture hiding his eyes?

[Demeter]

36. I don't know who any of them are, nor do I want to

One looks a lot like W, though

[Demeter]

12. Graphic Porn

http://www.businesspundit.com/wealth-distribution-in-the-united-states/

[AnneD]

52. It's not porn, it's a ......

Trail of Tears

www.youtube.com/watch?v=bWCl9YfbKa4&feature=related

[bread_and_roses]

83. good charts

and people wonder why the working class strikes out in rages like tea-baggers? If the Ds and our electeds would ever tell them the truth about all this, maybe they wouldn't turn to the only people talking to them - the nutjob Theocrat power-mongers and their Republican henchpersons. All that free-floating anger has to go somewhere when people know they are getting screwed but can't figure out how and why.

[KoKo]

92. It's a shame the "Tea Baggers" and "Tea Partiers" don't see charts like this...

but if they did...they wouldn't believe them...because it's not in their "script."

[a la izquierda]

16. Wow, where to begin.

It is a common fallacy that Indians lived in harmony with the earth. Did they respect the concept of protecting the earth? Probably. But, countless studies have been done regarding the environmental degradation of the earth by indigenous populations. See anything that hypothesizes the collapse of the classic Maya peoples.
Tribal is such a ridiculous word to describe many of the native populations who lived in the Americas. Does the term/concept work for, say, Amazonian peoples? Yes. Does it work for the Incas, Mexica, Mayas or those now known as Iroquois or Navajo? Nope, not in the slightest. The Mexica (Aztecs) and Incas were, at the time of the Spanish arrival, as hierarchical as any European power. The Mayas were more hierarchical at their height than Europeans during comparable times.
Jeez, I really wish economists would stick to what they don't know-the economy-instead of trying to talk about what they *really* can't fathom-humanities.

Sorry for the slam, but this the lack of historical knowledge is kind of appalling.

[AnneD]

49. As far as I know.....

the conversation was about North American Indians. At their cultural zenith, the Plains Indians probably the closest to having a zero carbon footprint. The Anasazi had the most archtecurally futuisticc dwelling I have ever seen, yet we don't know what happened to them.

The South and Central Indians were ones that set up empires, conquered smaller tribes etc. In North America, with the exception of fighting for hunting territory there was not so much war. Young and female captured were slaves in the loosest of sense of the word and were generally intergated into the tribe. The Mayans and Aztecs had to have slaves for their construction projects.

One of the things that I tried to explain when Demeter first discussed the theme was that there were so many different tribes. I know the Cherokee. I have other tribes I know well in the North West (Yakima among them), but I don't even pretend to be an expert and I have lots of idegenious blood coursing through these veins.

So there is no need for a slam and enlightenment goes both ways.

[a la izquierda]

78. First of all, I wasn't slamming you. I wasn't even slamming

Demeter. The premise of the article (if she wrote it, the OP title is a bit misleading) is fine. I was slamming part of the theme of the article, which is factually wrong. It's a generalized statement which cannot be made about Native peoples anywhere. At the height of their cultural zenith, Plains peoples may not have had much of a carbon footprint...but it depends on when you place that zenith. If it's before the horse, then ask the buffalo how environmentally sound they were. If it's after the horse, fine. We don't even know which groups lived on what part of the Plains before Europeans arrived, but even the Lakota acknowledge they came from elsewhere. Most do. The problem with the OP is that it is vague and general. I am a historian who has studied indigenous populations in the western hemisphere for a very long time. I've been trained to find fallacy in the common American thinking about our Native peoples. I'm keen to generalized lines of thinking/writing, which blur over facts with long-repeated falsehoods. Cronon's 1983 "Changes in the Land" totally debunks this theory in terms of North American populations. This should be common knowledge by now, but it's not. That's sad.

There were empires, of sorts, in what is now North America-Cahokia being one. Moundbuilding societies, from which the southeastern Indians *probably* arose (in some form) descended from them and their ancestors (Cherokees most likely included). Moundbuilders lived all over the south. The site at Cahokia was built with labor who was decidedly less equal than the leadership, which was based upon links to supernatural deities. It was probably not environmentally harmonious.

Nobody knows why the Anasazi fled (they disappeared from the area, but probably just moved), though the suspicion is breakdown in societal norms due to: environmental factors (not the least of which was the problem of supporting a large population in a desert with a slim margin of error in the event of drought).

So, sorry if I'm not enlightened enough. I'm blunt about what I know and I have serious bugaboos about ignorance (not claiming that you or Demeter are ignorant on the topic) on indigenous peoples and Latin America. It's great that you're indigenous and know some of the history of the varied peoples who lived in North America...though if you were trying to use that as a barb against me, trust me, I've heard it all before. I don't claim to be an expert on North American Indians...I decided studying Native North America was entirely too problematic. But, I did study it for a very long time before switching to Latin America.

[Ghost Dog]

81. I can assure you that indigenous European and Mediterranean peoples,

of whom I have some in-situ first-hand knowledge, are to this day quite tribal, as we have always been, probably everywhere, complex hierarchical societal constructs notwithstanding.

I would love to find accessible literary sources on research into all these areas - and as non-partisan as possible, if possible.

I believe I heard that Marx, and/or Engels did some research, or reported some observations, in this area. Perhaps you could enlighten us.

Um. http://bermudaradical.wordpress.com/2009/12/05/from-marx-to-morales-indigenous-socialism-and-the-latin-americanization-of-marxism/

http://books.google.es/books?id=yiKgBuSUPUIC&pg=PT408&lpg=PT408&dq=engels+indigenous+north+americans&source=bl&ots=jKCZcPUx-H&sig=Cm9jEDCq_bj9e288sW1Q4Ibg-J0&hl=en&ei=8VRbS46OA8-TjAfHseSbAg&sa=X&oi=book_result&ct=result&resnum=8&ved=0CB8Q6AEwBw#v=onepage&q=engels%20indigenous%20north%20americans&f=false

[Po_d Mainiac]

86. While doing mindless, but hard labor

(firewood) My train of thought kept derailing on the question of when will all populations begin to think as "Earthlings" and trash the tribal bond ethic?

Geez, we label invaders from space based on their planet of origin.

I hope the aliens that seeded Earth will return in my lifetime (better happen soon) and straighten us the fuck up. You'd think that after watching "Idol" "The Golden Globes" "Big Brother" "Glenn Beck" and "Survivor" on their viewers, they'd realize how desperate things have become

[a la izquierda]

90. probably so...but tribal is an odd word

that is often misapplied to indigenous groups in the americas. some were, absolutely. but again, the point i was trying to make is that generalizing is really problematic.

[AnneD]

100. I think humans will always be" tribal".....

we are pack animals-it is what has helped us survive the evolutionary test of time. It is hardwired into our system. The sooner we accept that, the sooner we can deal with it in an intelligent way. It is like AA,,,,healing starts when you admit you are an Alcoholic. Once you admit you are tribal, you can put your feeling in their proper perspective. I don't have hatred for the Muslim tribe because of the few that have broken away. I don't have hatred for the Hispanic tribe because they come here, etc. It can stop ethnic cleansing cold if used right.

[Joe Chi Minh]

132. Maybe, tribal carries lingering negative overtones, but it shouldn't.

We were taught in anthropology - if we needed to be told - that there is no such thing as a primitive people. People historically designated in that way have invariably adapted to their environment, in some cases, extremely harsh, in the most brilliant ways.

And finally, it's been established that the brains of troglodytes are no whit inferior to our own. Given our Brave New World, I suppose that could be damning them with faint praise.

[AnneD]

146. The best example of arrogant bias....

was the discovery of large building in Africa. The discovers thought they were ancient Greek (I think they may have been Bantu but don't hold me to that) becuse they knew that Africans could not have made those.:eyes:

[Joe Chi Minh]

150. It's ignorance of the heart that makes a person primitive in the real sense of the word, isn't it?

And it is an affliction that lays people low of every social class. While ironically, so-called primitive hunter-gatherers, like New Guinea tribesmen we saw on TV, here in the UK recently, seem astonishingly wise.

I suppose it is a truism that mankind, generally, remains as primitive as ever in that negative sense, our civilisation being a veneer - as WWII attested all too graphically. We're all cut from the same cloth, but some are vigilant to rebuff the badness in our nature, while others embrace it.

[AnneD]

151. Well spoken...

eom

[AnneD]

87. Now I can speak about Plains Indians and Buffalo hunting....

and even buffaloes. For a while, my older brother was a foreman on a ranch that had buffalo (and Long Horns). My brother is a horseman par excellence. He is tall and long legs that can wrap around a horse. When we were kids we helped our Uncle break a train horses (bare back usually). Brother has the gift.

But back to Plains Indians...Indians killed more buffalo before the horse because the way that they could safely kill they was to drive a portion of the herd off the cliffs. That could lead to over kill . But rest assured they developed uses for every part of the buffalo. With the reintroduction of the horses to the Great Plains, Indians were able to cut down on overkill by safely hunting what they need. Hunting time was reduced and horses aided in moving the tribe to their winter or summer grounds (and any farmer can tell you the benefits of rotation). The Indians only hunted for what they needed. They used every part on the buffalo-from bladders to carry water, hides for tents, clothes, and blankets , to sinew and tendons for thread and bones for needles and buttons. The buffalo was everything to them.

Now about the buffalo...they breed faster than rabbits. The Great Plains was an all you can eat buffet for them. Predators like wolves and man kept their population in check and culled off the slower. Indians would not pick off a mother and calf yet wolves would.

Now one thing my Brother told me was buffaloes are so massive and muscled ( a good bull is a little over 6'high and 10" long )that once his small herd would get spooked, it was hell to slow them down. He was forever repairing the fences they tore down when they stampeded. At the height of the buffalo numbers-they made it impossible for the railroads to traverse across the country. So between the bounty offered by the rail roads for hides and the desire by Anglos for robes and hats, the decline of the Plains culture was rapid and stunning after the decimation of the buffalo.

I agree-humans are human and there is always much intermingling (the most startling is parrot feathers and materials from central america that were excavated at the Anasazi site) . I suspect pow wows and other gatherings have been going on longer than we think. No race is monolithic.

Since you don't post much here, you are not familiar with me or my style. I only throw barbs with folks I know well. If I wished to insult you, you'd know it, so chill out. I frequently find myself cringing at what passes for Indian too, but I don't get offensive or defensive. I get really Indian and shut my mouth. I look forward to your posts on Central and South America as I have little knowledge in that area.

There are some things I have learned by books and there are some things I have learned by doing. But the most important things were passed down to me by my elders, by their words and actions. I feel blessed to have these unique nuggets of tribal wisdom given to me. I have passed them down to my daughter and now my niece. As Carl Jung would say, it is part of our collective tribal memory.

My Indian "souviners".... and examples of group memory is a metamorphic rock, round except for one flattened side. Most folks think it is stupid rock-but I see an ancient grinding stone. But my favourite is an oddly shaped chert stone that a friend found at a mound on his property. He knew my heritage and challenged me to guess what it was. He knew it was a tool but didn't know what. As he held out the clam shaped stone to me, I felt like I was in a trance. I reached out, placing my thumb in the groove. It fit perfectly. I picked it up and wrapped my fingers around it. The minute it fit in my hand-I knew it was a still sharp scraping tool. I floored him when showed him how it worked. He gave it to me on the spot and had me try to identify the rest of his finds. I could never knap something like that so I appreciate its value.

[KoKo]

93. OMG....

[Tansy_Gold]

120. When you have held it in your hand. . . . .

My paternal grandfather was a racist. He despised my mother -- his daughter-in-law -- because her mother was Jewish. Yet he claimed, without concrete evidence, that someone back two or three generations from him had married an Indian woman. I never found anything, other than a woman with the last name Crow, that was even suggestive of such, but neither did I ever challenge it.

When I married and moved to Indiana, where my husband's family had a small farm, I found a few broken "arrowheads" in a desk my husband had shared with his brother when they were children. When I asked him about them, he said he'd found them while walking behind the tractor during spring plowing. I was fascinated, even though they were obviously crude and broken. I couldn't wait for the spring to arrive, so I could walk behind the plow and look for arrowheads. I never did.

But some years later, when we contemplated buying a neighboring farm, we walked to the back of the 25-acre property with the real estate agent to check out the small patch of woods, and as we returned, walking through the recently plowed field, I saw a starkly white stone poking out of the moist black earth. Far too large to be an arrowhead, it was part -- only part -- of a spear point. The chert material was coarse, the edges dull, but it was my first find.

Then one windy afternoon, my husband and a friend went to play golf and I walked along, having nothing better to do that day. The cart path was fine lakeside "blow" sand, and the wind stirred it into the air, creating a threat to my contact lenses. So I walked with my hands cupped around my eyes and looked down, and that's how I saw the oddly textured bit of brown flint, its edges covered by sand but its surface distinctive and unnatural,lying in the middle of the cart path. I picked it up and held in my hand a beautiful long spear point, unbroken except for a tiny chip on one of the tangs. The edges were sharp and translucent, the shape sleek and aerodynamic.

We'd gone rock hunting one day, long after our move to Arizona, and we came to a crestate saguaro. They are rare enough to be worth taking a picture. As I hiked to the far side of the big cactus, where the light was better, my husband called to me. Thinking from the tone of his voice that he might have stepped on a cactus or something, I hastened back to him and found him simply pointing to the ground. At first I thought the object was a piece of chalcedony, a common enough rock. But as I looked at it, I realized it was another spearpoint, fashioned not of flint like my find on the golf course, but of beautiful pink chalcedony. Roughly the same shape as but slightly smaller than the flint one, it was just lying there in the desert gravel.

A few years after my husband died, I went rock hunting with the local club. There were about 15 of us, including several children ranging in age from 5 to about 12. We parked at the bottom of low hill, and trudged numerous times to the top of the hill, a distance of about 200, 300 yards. Not far. And the slope was very gradual, making it easy to make many trips and bring down many of the rich red jasper pieces that littered the top. As the afternoon waned and it came time to consider leaving to come home, I made one last trip to the top, then came down the well-worn and slightly muddy path all of us had used all afternoon. Slightly muddy and slightly slippery, so I kept my eyes on the ground as I walked with my hands full of jasper chunks. Why I saw it and no one else had, I don't know, but I did, and this time it was indeed an arrowhead, small and made of the same pink chalcedony that is so common in the desert.

It is one thing to see them in a museum or a collection. It is another thing to watch the modern knappers turn a blob of obsidian or a nodule of flint into a knife blade. But it is altogether different to find it where it lies and pick it up, wondering how it got there, who made it, why they lost it.

I've found pottery shards too, and remnants of walls. The connection is made.



Tansy Gold

[Demeter]

125. I Saw a Knapper

at the Gitchee Gumee museum in Grand Marais, Michigan, must be 45 years ago...

http://www.agatelady.com/

also found some small agates in Lake Superior.

[AnneD]

147. My friends farm land....

was by a creek that had been there forever. I use to watch beavers build their den. There were elevations all around. He just ran cattle and horses on this part. He kept finding things and we finally figured all those elevations were mounds. Water, rich soil, and game-a perfect combo. The archeology department begged him to let them dig because he kept bringing up stuff to be identified. He refused because (and this was long ago) because as he put it, this could be a sacred burial ground and these people deserve their respect, The earth will give up the past when it is ready. He takes the university things and has willed his collection to them when he passes but he will not let them dig. He had a chert shovel (I bet that thing is priceless as it is unbroken) and bird arrowheads no bigger than your thumb). I really prize that hide scraper.

[DemReadingDU]

148. There is an Adena mound near my house

Actually, several mounds in our area of SW Ohio. I think that is why my spouse's uncle is able to have found so many arrowheads.

http://en.wikipedia.org/wiki/Adena_culture

[Tansy_Gold]

149. the farm my husband grew up on.....

is in northeast Indiana. It had been in the family since the 1870s or so. My mother-in-law put out an extensive garden every year in the soft, sandy soil behind the house, but my father-in-law plowed a separate section in the field next to the house for sweet corn. Every year, year after year, he plowed that same area just on the other side of the fence. He'd been doing it for probably 30 years, maybe more.

One spring Saturday while we were out at the farm, he came in from plowing that little sweet corn plot with some big muddy thing in his hand. Even when he rinsed the dirt off it, it still looked like a big muddy thing because it was exactly the same color as the soil. But it was in fact a beautiful and unbroken axe head.

They sold the farm in 2003. I have no idea what happened to the axe head, but I'm sure they still have it.

[DemReadingDU]

142. My spouse's uncle has collected arrowheads forever

He is 90, and has quite a collection from where we live in SW Ohio. Reading this thread has prompted me to learn more about some he had given to my children when they were younger.

[Demeter]

18. Fitch: U.S. Retail Credit Card Defaults Hit Near-Record Levels with No Relief in Sight

http://insurancenewsnet.com/article.aspx?id=154105

U.S. consumers defaulted on store-branded credit cards at near-record levels during the holiday shopping season, with 2010 likely to bring more of the same trend, according to Fitch Ratings.

Fitch's December Retail Credit Card Index results show that more than one in every eight dollars of receivables was written off as uncollectable during the November collection period on an annualized basis. Taken with the recent delinquency trends and Fitch's expectation for unemployment, Fitch expects retail card chargeoffs to remain elevated throughout first half-2010.

"We do not foresee any meaningful improvement in the retail card credit quality in the coming months," said Managing Director Michael Dean. "U.S. consumers remain under stress on a number of fronts, most notably on the employment front, and retail card chargeoffs will continue to reflect those pressures."

Despite the elevated chargeoff and delinquency measures, Fitch expects retail card ABS ratings to remain stable throughout 2010. Excess spread remains robust, which coupled with loss coverage multiples and other structural protections will shield investors from potential downgrades or early amortization scenarios.

In December, Fitch's Retail Credit Card Chargeoff Index snapped a two-month decline, rising 122 basis points (bps) to 12.56% from the previous month. Throughout 2009, chargeoffs surpassed the previous record (12.25% in January 2005) five times, establishing a new all-time high of 12.81% in August. Throughout the year, retail chargeoffs averaged 11.88% (more than 42% above the historical average of 8.34%).

"While results were negative throughout the year, we have seen the pace of deterioration moderate more recently," said Dean. "Certain issuers have also tightened underwriting standards and become more selective when adding new accounts, which should help mitigate loss rates longer term."

Late stage delinquencies, as measured by Fitch's 60+ day retail delinquency index, fell 15 bps to 5.22%. Late stage delinquencies averaged 5.25% for the past three months and 5.09% for all of 2009, exhibiting some signs of stabilizing albeit near record highs. Similar to chargeoffs, the deterioration in delinquencies has slowed significantly from the previous year, yet they still remain almost 48% higher than 2007. Despite these short term improvements, Fitch expects retail credit card delinquencies to remain elevated throughout first half 2010 in line with its expectations for unemployment.

High unemployment and ongoing household deleveraging will continue to limit demand for consumer credit in 2010. Consumer confidence as measured by the Conference Board remains historically low despite rising in the most recent period and unemployment is expected to remain elevated averaging 10.2% in 2010. 'Households will remain cautious with their spending and further curtail their use of retail cards in 2010,' said Dean.

This does not bode well for prospects of a robust rebound in retail sales or credit usage in 2010 as the employment situation and economic environment overall continues to weigh on consumers' spending decisions. The latest Fed figures show revolving credit usage decreased at an annual rate of 18.5% in November - the largest dollar-value drop since 1968 and the 14th consecutive decline since October 2008As long as the employment and income growth remain weak, demand for consumer credit - especially retail credit - will be limited.

In other retail card performance measures, Fitch's gross yield index bounced back from last month after sustaining a one-time drop in yield due mainly to systemic changes that temporarily affected the GE Capital Credit Card Master Note Trust. The yield index for November 2009 rose 217 bps to 25.57%, but remained unchanged when compared to the same period a year ago. As a result, three-month average excess spread rose by 18 bps to 8.07%. Retail credit card excess spread has been significantly less volatile compared to prime performance.

MPR for November 2009 fell by 23 bps to 12.90%, but remained only 3% slower than a year ago. Overall, performance in the retail sector is solid with 3 month average excess spread hovering between 7.50% and 8.00% during 2009.

Fitch's Retail Credit Card index tracks more than $65 billion principal receivables backing approximately $49 billion of retail or private label credit card ABS. The index is primarily comprised of private label portfolios originated and serviced by Citibank (South Dakota) N.A., GE Money Bank HSBC Bank Nevada, N.A. and World Financial Network National Bank. More than 165 retailers are incorporated including Wal-Mart, Sears, Home Depot, Federated, Loews, J.C. Penney, Limited Brands, Best Buy, Lane Bryant and Dillard's, among others.

Additional information is available at 'www.fitchratings.com'

[Demeter]

19. Jobless rates rose in all 50 states for 2009

http://www.bizjournals.com/sacramento/stories/2010/01/18/daily51.html

All 50 states ended 2009 with higher unemployment rates than a year earlier, according to a report issued Friday morning by the U.S. Bureau of Labor Statistics.

Nevada and West Virginia registered the sharpest upswings in unemployment last year, each rising by 4.6 percentage points. Nevada’s jobless rate soared from 8.4 percent in December 2008 to 13 percent in December 2009, while West Virginia’s rate climbed from 4.5 percent to 9.1 percent.

Minnesota and Nebraska showed the least upward movement. Their unemployment rates increased by just 0.8 percentage points during the past year.

California's unemployment rate rose from 8.7 percent in December 2008 to 12.4 percent in December 2009. Meanwhile, the jobless rate in the Sacramento region fell slightly last month.

The Bureau of Labor Statistics also reported the following:

• Sixteen states and the District of Columbia posted unemployment rates of 10 percent or higher at the end of 2009. Michigan was the worst at 14.6 percent. TELL ME SOMETHING I DON'T KNOW

• North Dakota had the lowest jobless rate, 4.4 percent. Nebraska and South Dakota were also below 5 percent.

• Every state lost jobs between the ends of 2008 and 2009. California suffered the worst decline in raw numbers, losing 579,400 jobs in a year. New York posted the eighth-worst loss, as 168,600 jobs melted away from its employment base since the end of 2008.

• The worst job loss in percentage terms occurred in Wyoming, which lost 6.8 percent of its jobs in a year. Nevada was next-worst at 6.6 percent.

[Demeter]

20. Two Dozen States’ Unemployment Funds in the Red, Nine More Within Six Months

http://www.propublica.org/feature/unemployment-funds-in-the-red-propublica-predicts-nine-more-within-0119

The record 20 million Americans who collected unemployment insurance benefits last year landed on a safety net that was already deeply frayed.

(New Interactive: ProPublica Predicts if Your State's Unemployment Insurance Fund Is About to Hit the Skids SEE LINK IN ARTICLE)

A historical compromise has left responsibility for unemployment benefits largely in the hands of states, and they have fulfilled this charge with varying degrees of effectiveness.

In a series last summer with public radio’s Marketplace, we reported that only a handful of states had built up reserves sufficient to weather the Great Recession – and forecast a spate of borrowing by states where reserves ran out.

Half a year later, the direst predictions seem to be coming true: So far 25 states have borrowed more than $25 billion to keep benefits flowing after their trust funds ran dry. In many other states the situation is deteriorating fast.

Our new unemployment insurance tracker monitors states’ trust funds using the most up-to-date data available on the Web – and projects the health of funds six months into the future. To help readers understand the roots of each state’s fiscal fiasco or success it also pulls together other helpful information and historical data that can be downloaded. According to our projections, Arizona, Colorado, Hawaii, Kansas, Maryland, Massachussetts, New Hampshire, Tennessee and Vermont will find themselves in the red within six months.

And while states’ poor fiscal planning is a serious topic on its own, our tracker also follows the increasing human toll: so far businesses in 36 states face tax increases this year, ranging from a few dollars per worker to more than a thousand. Six states have moved to cut, freeze or otherwise restrict benefits, a number that is likely to increase. (See our breakdown of states’ projected increase in taxes—and cuts in benefits.)

Some states have focused the pain, like Virginia, where unemployed seniors who also receive Social Security face steep benefit cuts. Other states, like Pennsylvania, have taken a broader approach: all unemployment beneficiaries will receive 2.4 percent smaller checks starting this month.

[Demeter]

21. UBS Client Wins Case on Transfer of Tax Data to U.S. (Update4)

http://www.businessweek.com/news/2010-01-22/ubs-client-wins-case-on-transfer-of-tax-data-to-u-s-update3-.html

A UBS AG account holder won a Swiss court case preventing data from being disclosed in a ruling that may impede a U.S. crackdown on overseas tax evasion.

The failure by U.S. citizens to complete certain tax forms or declare income doesn’t constitute “tax fraud” that would require Switzerland to disclose account data, the country’s Federal Administrative Court ruled in a judgment released today.

Switzerland agreed in August to pass on information about as many as 4,450 UBS accounts to the U.S. to help the country’s largest bank settle a lawsuit related to suspected tax evasion. Today’s ruling, the first on the settlement, may undermine the agreement, said Cono Namorato, a lawyer at Caplin & Drysdale, which represents about 200 UBS clients.

“The prosecutors at the Justice Department are not going to be happy with this opinion,” Namorato said in an interview in Washington. “It guts the settlement that they negotiated with the Swiss authorities.”

Switzerland and the U.S. said in an annex to the UBS settlement agreement that U.S. citizens who benefited from offshore company accounts with UBS between 2001 and 2008, as well as U.S.-based clients of UBS who didn’t disclose accounts or deposits in excess of 1 million Swiss francs ($960,000) could be covered if there is a reasonable suspicion of “tax fraud or the like.”

W-9 Form

The Swiss government said in a statement that it will decide Jan. 27 how the Swiss-U.S. agreement can be implemented in light of the ruling. U.S. Justice Department spokesman Charles Miller declined to comment.

Zurich-based UBS said in an e-mailed statement that it had taken notice of the decision. The Internal Revenue Service said in a statement that while the agency hadn’t reviewed the ruling it “had every expectation that the Swiss government will continue to honor the terms of the agreement.”

“Provided the taxpayer did nothing more than not declare income, an account or return the form W-9, consequently committing tax evasion under Swiss law, he hasn’t acted fraudulently,” the five judges wrote. U.S. taxpayers use the W- 9 form to declare foreign bank accounts.

Today’s ruling involved a single test case, and the court said there were 25 more involving similar claims that it will ask the Swiss tax authority to review.

“It’s a landmark decision,” said Bernhard Loetscher a partner at Zurich-based law firm CMS von Erlach Henrici AG. “The court considers the case so crystal clear that it invited the SFTA to withdraw the 25 other claims.”

4,450 Accounts

Of the 4,450 cases, 250 accounts involved fraud, including false documentation and a “scheme of lies,” and the remaining 4,200 were situations of “continued serious tax offenses.”

“As I read it, many of those 4,200 accounts are out of the process now,” Loetscher said.

The court called the annex a “memorandum of understanding,” that didn’t alter a 1996 double-taxation treaty. The same court in a separate decision earlier this month said that the country’s financial regulator broke the law when it turned over data on another 255 UBS clients in February.

Voluntary disclosures of secret offshore bank accounts were made by 14,700 Americans to the Internal Revenue Service during a partial tax amnesty that ended in mid-October. About 12,000 came after the August agreement between the U.S. and Switzerland.

No Second Guessing

“I don’t think this should cause anybody to second-guess a decision to make a voluntary disclosure,” said Scott Michel, another attorney at Caplin & Drysdale. “While some people may have second thoughts about what they did, April 15 rolls around pretty quickly and they would have been in a position to commit another felony if they hadn’t cleaned up their account situation.”

Under the 1996 double taxation treaty, “tax fraud and the like” means fraudulent behavior that causes or attempts an illegal and important reduction in tax owed. Examples included keeping separate accounts of incorrect profit, losses and orders, as well as a scheme of lies.

Switzerland distinguishes between tax fraud, which is a crime, and tax evasion, which is a civil offense. The country’s bank secrecy laws were amended in 1998 to stop banks from shielding the identities of those suspected of money laundering or tax fraud.

“The U.S. will soon start to renegotiate the double taxation treaty, to give up the distinction between tax evasion and tax fraud,” said Zurich lawyer Wolfram Kuoni. “The key battle will be if it will apply retrospectively.”

Today’s case is: A. vs. Eidgenoessiche Steuerverwaltung (ESTV), A-7789/2009. Federal Administrative Court

[DemReadingDU]

22. funny joke

:)

[Demeter]

24. Which One?

The Bernanke reappointment? the Health care? the Supreme error?

Such an embarrassment of riches!

[DemReadingDU]

28. lol, I was responding to the joke in the OP

But all of the above. Plus add our country as another joke. Our founding fathers are rolling over in their graves.

[AnneD]

45. And they say the Native Americans were ignorant savages......

think of all the disposable diapers sitting in landfills when your read this......

I went to the Museum of the Plains Indians once we we traveled to Cody, Wyo.and learned much (Mom has Plains Indian up her tree). Disposable diapers were very new at the time and the ecology movement wasn't. I was traveling with my half brother who was just over a year old. I was use to cloth so disposables while traveling was the bee's knee's.

Well, the Plains Indians had ecologically efficient diapers first. They took dried buffalo chips and pounded them into a fine powder. They placed the powder in the cradle board base and strap the child and and go about their work. The powder is absorbent and actually had a sweet smell. They would take the urine soaked powder and dry it and reuse it for several more times. If the child was sitting in bull...they pitched it :hide:

[Demeter]

23. One quarter of US grain crops fed to cars - not people, new figures show

http://www.guardian.co.uk/environment/2010/jan/22/quarter-us-grain-biofuels-food

New analysis of 2009 US Department of Agriculture figures suggests biofuel revolution is impacting on world food supplies

One-quarter of all the maize and other grain crops grown in the US now ends up as biofuel in cars rather than being used to feed people, according to new analysis which suggests that the biofuel revolution launched by former President George Bush in 2007 is impacting on world food supplies.

The 2009 figures from the US Department of Agriculture shows ethanol production rising to record levels driven by farm subsidies and laws which require vehicles to use increasing amounts of biofuels.

"The grain grown to produce fuel in the US was enough to feed 330 million people for one year at average world consumption levels," said Lester Brown, the director of the Earth Policy Institute, a Washington thinktank ithat conducted the analysis.

Last year 107m tonnes of grain, mostly corn, was grown by US farmers to be blended with petrol. This was nearly twice as much as in 2007, when Bush challenged farmers to increase production by 500% by 2017 to save cut oil imports and reduce carbon emissions.


Graph - US grain used to make ethanol

More than 80 new ethanol plants have been built since then, with more expected by 2015, by which time the US will need to produce a further 5bn gallons of ethanol if it is to meet its renewable fuel standard.

According to Brown, the growing demand for US ethanol derived from grains helped to push world grain prices to record highs between late 2006 and 2008. In 2008, the Guardian revealed a secret World Bank report that concluded that the drive for biofuels by American and European governments had pushed up food prices by 75%, in stark contrast to US claims that prices had risen only 2-3% as a result.

Since then, the number of hungry people in the world has increased to over 1 billion people, according to the UN's World Food programme.

"Continuing to divert more food to fuel, as is now mandated by the US federal government in its renewable fuel standard, will likely only reinforce the disturbing rise in world hunger. By subsidising the production of ethanol to the tune of some $6bn each year, US taxpayers are in effect subsidising rising food bills at home and around the world," said Brown.

"The worst economic crisis since the great depression has recently brought food prices down from their peak, but they still remain well above their long-term average levels."

The US is by far the world's leading grain exporter, exporting more than Argentina, Australia, Canada, and Russia combined. In 2008, the UN called for a comprehensive review of biofuel production from food crops.

"There is a direct link between biofuels and food prices. The needs of the hungry must come before the needs of cars," said Meredith Alexander, biofuels campaigner at ActionAid in London. As well as the effect on food, campaigners also argue that many scientists question whether biofuels made from food crops actually save any greenhouse gas emissions.

But ethanol producers deny that their record production means less food. "Continued innovation in ethanol production and agricultural technology means that we don't have to make a false choice between food and fuel. We can more than meet the demand for food and livestock feed while reducing our dependence on foreign oil through the production of homegrown renewable ethanol," said Tom Buis, the chief executive of industry group Growth Energy.

[Demeter]

25. U.S. troops to help oversee Haiti ports, roads in earthquake relief

THIS ARTICLE MAKES MY BLOOD RUN COLD

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012203013.html

The United States on Friday (TODAY) secured formal approval for the U.S. military to help oversee all Haitian air and sea ports, and to help secure Haitian roads in support of international relief efforts, according to an agreement signed in Haiti by the United States and the United Nations.

The pact gives Haitian authorities and the U.N. peacekeeping mission in Haiti primary responsibility for maintaining law and order in the earthquake-ravaged country. But it grants the United States broad scope to intervene in civil disturbances, subject to a request by Haitian authorities.

The agreement says American authorities will establish a U.S. Joint Task Force Haiti to support the international humanitarian response. The task force will have responsibility for ensuring a functioning transportation system in Haiti and ensuring access to the country's air and sea ports and roads.

Friday's pact simply formalizes powers that the U.S. military has already been exercising in Haiti. It is also intended to clarify the division of powers among three separate forces: the Haitian police, the U.N. peacekeeping mission and the U.S. military.

The agreement states that the U.S. military will remain under the "autonomous" American chain of command but that U.S. authorities will "take into account and, as appropriate, fully support priority humanitarian and logistical requirements identified by the United Nations in their response activities."

The pact, which was not signed by Haitian leadership, says Haiti welcomes U.S. efforts "to support the immediate recovery, stability and long-term rebuilding of Haiti." It also states that the United States is "prepared to assist as needed in augmenting security in support of the government and people of Haiti and the United Nations, international partners and organizations on the ground."

U.S. officials said the absence of Haiti's signature on the security agreement does not mean that Haitians are being excluded from the decision-making. They said they have already spelled out the terms of the U.S. military presence in a Jan. 17 communique with the Haitian government and that they needed to establish a clear division of labor with the growing U.N. peacekeeping force.

"This agreement formalizes the working relationship between the United States and the United Nations on the ground in Haiti and ensures that this cooperation will continue in the challenging days and weeks ahead," said Susan E. Rice, U.S. ambassador to United Nations.

The pact spells out broad responsibilities for the United Nations, including a role in "ensuring a secure and stable environment" in Haiti and assisting Haiti in the restoration of the "rule of law, public safety and public order." It also spells out a role for U.N. mission in "protecting civilians under imminent threat of physical violence within its capabilities and areas of deployment."

FROM THE KING AND I: LYRICS BY Oscar Hammerstein II

PUZZLEMENT

"Shall I join with other nations in alliance?
If allies are weak, am I not best alone?
If allies are strong with power to protect me,
Might they not protect me out of all I own?"

[Demeter]

27. RESOURCE LIST FOR TREATIES BETWEEN US AND NATIVE PEOPLES

http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=007/llsl007.db&recNum=6

http://thorpe.ou.edu/treaties.html

http://digital.library.okstate.edu/kappler/

http://www.state.gov/r/pa/ho/time/dwe/16338.htm

http://avalon.law.yale.edu/subject_menus/ntreaty.asp

I UNDERSTAND THERE ARE ALSO ORIGINAL COPIES OF THE DECLARATION OF INDEPENDENCE AND THE CONSTITUTION OF THE UNITED STATES ON FILE SOMEWHERE--NOW JUST AS RESPECTED AND HONORED AS ALL THESE COLLECTED WORKS....

[Ghost Dog]

82. A word of advice: Don't try this in Cuba. n/t.

[Joe Chi Minh]

85. ROFL!

[bread_and_roses]

96. "not signed by Haitian leadership"

makes my blood run cold too...meanwhile, over at WaPo, the slide show tries hard to drum up some excitement over "fires" and "looting" and "U.S. troops work to prevent people from stampeding to receive food and water" Meanwhile, throughout the photos there are crowds - even long distance shots of huge crowds in the streets - which look remarkably non-violent. Just yesterday listening to Amy Goodman reporting from the epicenter, a flattened town, where no help had arrived but it didn't sound like anyone was rioting or violent....but no help, food, water, medicine. I had to wonder if any of the children buried in the school could have been saved with equipment, dogs, teams? Nothing makes any sense, anywhere. This is the worst week since Katrina to my mind.

[jotsy]

29. I try to keep an eye on bank closure friday, the info you provide on a consistent basis

is something I see as a public service, just wanted to express my gratitude for you dedication, informative copy and entertaining style. Thank you.

BTW, are the big banks are monopolizing?

[Demeter]

37. Not Sure What You Are Asking

The Zombie Banks are either too big to liquidate, or too well connected. FDIC hasn't shut down anyone over $1b to $2B in size as of yet, if I recall correctly.

The FDIC budget is way in the red, too. It is living on loans, subsidies, gouging the remaining banks, and prayer that some of the worthless paper they've been left with will someday have some value.

Small banks get taken over by larger regionals--sometimes in entirely different regions--who think they can grow thereby. Sometimes, they even pay for the privilege!

I Don't think the Big Zombies have merged with anyone since all the investment banks formed holding companies to get under FDIC protection after the Lehman collapse (or planned demolition). At least, I sure hope not.

And it's not like there's been ANY enforcement of Anti-Trust rules to break up monopolies since Reagan declared it was "mourning in America (intentional misspelling)" and broke up the unions. That's SO 20th Century!

[jotsy]

47. Good information!!

tyvm

Clearly, I've got lots to learn to do the depth of your effort to provide me an answer any justice. It strikes me that the large banks are at the root of their smaller counterparts demise and wanted to ask that of someone with some expertise, which you seem to not just possess, but share.

Saw a post at Common Dreams a few weeks back, suggesting we forget auditing the fed and take stock of Fort Knox. After thinking about it in the back of my mind off and on, I went back yesterday and copied it to gain a greater understanding, but I'm in over my head. As much as I'd like to see that info posted here at DU, I don't feel it appropriate without its authors consent, as the post was in response to a published article. Checked the DU journals, but said poster is not listed here, at least not by the same name.

Have a great weekend.
Stay warm!

[Demeter]

53. I Have No Expertise, Believe Me

I'm just a student of the subject, as all are on this thread, looking for answers and trying to cut through the lies, puffery, and delusion that we are force fed by mass media and the corporate masters.

It's hard to say who is to blame for our current economic catastrophe.

My personal choice would be Alan Greenspan, who destroyed the savings cycle in this country.

When Greenspan came in, we had all been put through the wringer by Paul Volker's inflation-fighting policy of cranking up the interest rates until ones eyes and ears bled. This was a fantastic incentive for people to save for retirement in IRA accounts, and a lot of people did. The banks had stable deposits to lend out, and everything was going quite well.

Well, Reagan wanted his tax cuts for the rich, and Greenspan doubled the economic fallout by dropping interest rates into the cellar. Suddenly all this money had no place to go. So people went into the market in search of capital gains, and business went into building bigger, more expensive, and far too many homes using the easy credit.

As for Fort Knox, I have an open mind. I wouldn't put it past the recent governments to have emptied out all the gold and sold it or lent it. On the other hand, if such a thing had happened, I expect somebody would have blown the whistle by now...because that's just about the only way we find out anything about our government's crimes, these days. And there are still a few people whose sense of right and wrong (or revenge) cannot tolerate and ignore official wrong-doing.

The rest is misery.

Until the interest/saving cycle is restored, I don't think we are going to be much of an economic power. When people say "Americans are saving again" they are really saying that we are not borrowing as much as before, paying off and closing credit cards, losing homes to foreclosure, etc. That's not saving.

[Demeter]

33. The Government is Desperate For Money; Doug Casey on Unemployment

http://www.informationclearinghouse.info/article24470.htm

January 22, 2010 -- Interviewed by Louis James, Editor, International Speculator)

L: Doug, I saw a Wall Street Journal headline a few days ago that boldly proclaimed, “Car Makers May Hire Soon.” Be still, my trembling heart! It’s hard to believe the WSJ would stoop to such a meaningless headline, but I guess they are just trying to give their desperate customers what they want: some hope, whether valid or not. What do you make of the unemployment situation?

Doug: Well, they say that during the depression of the 1930s, unemployment went as high as 25%. That’s interesting, in that at the time, half the people in the country were still farmers. They knew how to make the things they used in daily life with their own hands, and how to grow their own food. There was less specialization in the economy, and people were more self-sufficient. That made them better able to cope with an economic depression.

So it seems to me that that depression wasn’t anywhere near as bad as this one is going to be. It was caused by the inflation of the currency in the 1920s, by the Federal Reserve, and was prolonged by the actions that Hoover took, which were in exactly the same vein as those Roosevelt took later. Hoover was quite a dirigiste – I mean, Roosevelt applauded all the things Hoover did, but Hoover didn’t have the panache and good PR that Roosevelt did. But everything these two did – and both were disasters, lengthening and deepening the depression – was trivial by comparison to what’s being done today.

The government today is making things far worse than in the 1920s and 1930s. Everything the government is doing is not just the wrong thing; it’s exactly the opposite of the right thing. But more importantly, as far as unemployment is concerned, this inflationary boom has gone on much longer than that of the ‘20s. Not only does that call for a bigger correction, but unsustainable patterns of production and consumption have become far more ingrained.

L: Consuming more than you produce is not sustainable, but people can tighten their belts…

Doug: That’s only part of it. If people lose their jobs today… Well, they are pretty far from the land, and I’m not sure people today think about that. Back in the ‘20s and ‘30s, if your car broke down, it was expected that you would get out and, under a shady tree, fix it yourself. And you could – you could even take the engine apart and fix a bearing. That’s not in the least practical today. You’ve got to have the money to pay a specialist to fix your car today.

Back then lots of people who weren’t even farmers had vegetable gardens and chickens in their yards. Today, people live in suburbs – chickens and goats are out of the question.

L: I get it: what will unemployed golf cart salesmen do when they can’t find jobs – today, they can’t just go back to the farm and help with the chores. But they say unemployment is only around 10% now; even if that’s low, it will need to get more than twice as bad before it compares to the 1930s.

Doug: The government is saying the unemployment is around 10%, but that’s a fraud. They don’t count things the same way as they did then, not even as they did in the recession of 1982. Furthermore, they should count many government employees among the unemployed, since relatively few of them produce anything that anyone would voluntarily pay for. I’m not talking about police, garbage collectors, judges, and the like. The market would employ many of them in their current jobs even if the state were to disappear. But many of the apparatchiks filling offices not only don’t serve any useful purpose, but they actively destroy, and prevent the creation of, wealth. These people are worse than just unemployed.

Something else. Very few of the 1.5 million people in the Armed Forces actually create wealth or would be paid, in a free market, to do what they do. The same goes for the perhaps several million contractors and employees that compose the so-called “defense” industry. Obama is giving veterans preference in hiring for government jobs as well. Which means people who are not only quite jingoistic as a group but most used to taking orders – and giving them – will increasingly dominate the civil service. And, benefits included, government jobs now pay about 50% more than those in the real world. This is not a good trend any way you look at it.

The government’s unemployment figures basically include people who are paid to dig ditches during the day and others who fill them up at night.

L: And they don’t count “discouraged workers” as being part of the workforce, so they’re not unemployed.

Doug: Yes, it’s like that cartoon you ran in this month’s International Speculator, showing all the groups of people who are not working but who are not counted as unemployed. People who’ve given up looking for jobs are not unemployed, Ph.D.s working a few hours a week at Walmart are not unemployed, and there are more stupid evasions like that going on. So fewer and fewer of the numbers they give us are meaningful.

But I always look at the bright side. Many of these people will find their way into the underground economy and provide goods and services to others without government approval. All the taxes they’re saving means they can effectively double their take-home income, or charge half as much, or some combination. And, very important, it denies revenue to the state, even as it puts the thought into people’s heads that they don’t need the state – the state needs them. Many who spend time in the “black economy” might even get the idea that being independent is preferable to being a serf.

L: I just looked up John Williams’ shadow stats on unemployment, and he’s showing BLS Broadest unemployment, which includes “short-term discouraged workers” at over 17%. His SGS alternate unemployment, which includes “long-term discouraged workers” (who were “defined out of official existence in 1994”), is about 22%.

Doug: So, it’s already much worse than people think. And on top of that, people seem to suffer from a mass delusion that things will get better soon. I don’t think things will get better anytime soon. For one thing, the level of debt in the U.S. is off the charts. Debt means you’re borrowing from the future, saving means putting something aside for the future. The level of debt in all areas – real estate, credit cards, personal loans, and so forth – has brought Americans to negative savings in recent years, a first. That didn’t even happen during the Great Depression.

One of the things that makes this particularly serious now is that rumors are circulating about the government licking its chops over all the money sitting in personal pension funds, Keogh plans, HR-10 plans, etc. The Pension Benefit Guarantee Corporation (PBGC – like the FDIC, but for pension funds) is bankrupt, and it’s going to get much worse. It’s still early days in this grand misadventure. Usually – not always, but usually – when things get really bad, they float some trial balloons to see how people might react to things they are considering. One of the most dangerous proposals floating out there now is that, since people’s pension plans have been hurt so badly, people should be required to buy annuities with their pension funds.

L: Isn’t that what Social Security is supposed to be?

Doug: Well, that’s never been anything but a welfare scheme. Logic does not apply in the government sphere. One way or another, the government will get more involved in pensions, and I suspect they’ll do it like they did down here in Argentina. I doubt most Americans are aware that the Argentine government basically nationalized everyone’s private pension plans last year, including those denominated in dollars, and now they are going to pay people in pesos, fresh off the printing press. I think the same thing is going to happen in the U.S.: they’ll require that a certain percentage of your pension plan be used to buy T-bills, or other government securities, or an approved annuity. This will be for the safety of The People, of course. The end result will be to wipe out an entire form of financial security Americans count on today.

L: What should Americans with pension plans do?

Doug: The smartest thing to do would be to get them offshore. I say this so often in these conversations and other places that I fear sounding like a broken record, but it’s really that important. But it’s absolutely true that for an American, the safest wealth is the wealth that’s outside of the U.S. Your biggest risk is a political risk, from a completely bankrupt U.S. government. Most people are completely unaware of it, but it’s possible to buy productive foreign real estate in your pension plans. It would be difficult for the government to force people to repatriate such assets, and that affords a measure of safety.

People should look at this. The government is desperate for money. They are going to run a trillion-dollar deficit this year, plus, they have to roll over a trillion and a half dollars of short-term paper, so somehow they are going to have to find buyers for $2.5 trillion of debt this year.

L: Somehow, I can’t imagine the Chinese and Japanese lining up to pour that much money into U.S. government promises.

Doug: And absolutely not at the artificially low interest rates the Fed is maintaining. They are going to be in a mad scramble for money; the Federal Reserve will likely wind up buying a lot of it, which could result in up to 2.5 trillion more dollar bills floating around the U.S., in just one year. So, they really are between a rock and a hard place, as we’ve been saying in The Casey Report. There’s just no way out. So I think the pension plans are going to be the next victims of this ongoing crash.

L: So… We have, and will have, much higher unemployment than the government is admitting, and at the same time, the government is going to steal people’s savings?

Doug: That’s precisely what’s going to happen. Unemployment is going to stay high, because the whole of U.S. society is oriented towards patterns of production and consumption that are unsustainable. They were built on a pyramid of debt, and that debt is collapsing. I don’t know what the new patterns are going to be, but there are a lot of people who are going to have to find totally new things to do.

And they’re going to have to find new places to live as well. They just aren’t going to be able to afford their McMansions. Even if the government helps them pay their mortgages, they are not going to be able to pay the soaring real estate taxes, they are not going to be able to maintain them properly, and they are not going to be able to pay the utilities.

L: And again, by “patterns of production and consumption,” you don’t just mean spending more than you make. You mean that the U.S. has a surplus of paper pushers and telephone sanitizers, and a deficit of people who actually make things of value, and therefore, as a society, is not productive – or something along these lines?

Doug: Yes. Think about some of these businesses that have grown up during the boom times – like personal trainers. The “service economy” in general. Americans have gotten used to the notion of “We think, they work.”

L: Meaning that Americans don’t do physical work?

Doug: Right, so they go down to the gym to exercise. A personal trainer is nice to have but is completely unnecessary. All you really need is a little willpower. Incidentally, I’m not a fan of physical labor; it tends to be of low productivity. Machines should do it and eventually will do most of it. So there should be much more wealth in a free market, with much less work as a result. But you get there by thinking and using engineering and science to give reality to the thoughts.

Unfortunately, few Americans study these things. They go for subjects that range from those that are worth less than nothing – like political science, collectivist economics, and gender studies – to those that are simply worth nothing – like English lit, psychology, and history. As you know (see our conversation on education), I’m not at all opposed to these things. It’s just that you should study them on your own. Meanwhile, kids from the Orient and Eastern Europe are doing math, science, and engineering. I suppose future Americans can do their menial jobs, and a few can become entertainers or athletes.

L: We have a bunch of young Eastern Europeans working for us, and they’re very bright and competent.

Doug: Indeed. Another job that I think caters to the artificially high patterns of consumption we’ve seen over the last 25 to 30 years is being a lawyer. Millions of people have become lawyers over the last couple decades, and 95% of them are unnecessary and a drain on the economy.

L: I read in another WSJ article that crime has actually dropped since the crisis hit, which doesn’t make it sound like boom time for lawyers.

Doug: Well, few lawyers actually defend criminal cases, but that is interesting. Another surplus is MBAs, of which it seems we have millions; if they had any possibility of succeeding in business, that’s what they’d be doing, instead of wasting time and money listening to academics yap about it. And people in the financial business – there’s going to be much less demand for brokers, bankers, advisors, planners, and such in the years to come. They’ve come to expect a lot of money for shuffling paper, based on the financial industry being in a bubble. A huge swath of white-collar workers are going to have to figure out a new and productive way to put bread on the table. Assuming they still have a table after their McMansion gets repo’d.

L: What about Starbucks and all its clones? You think people are going to be willing to pay $5 for a cup of coffee during the Greater Depression?

Doug: It’s interesting… you know, even when I was a kid, one of the catchphrases people used when someone would offer an opinion was: “That and 10 cents will get you a cup of coffee.” Since a cup of coffee almost anywhere cost about 10 cents, the implication for the value of the opinion was clear. And a cup of coffee was still 10 cents not so many years ago in most places – your $5 cup of Starbucks coffee is a long way from there.

Given how little a cup of coffee really costs, even with inflation, Starbucks may be a dead man walking; many people are going to be forced to dispense with the extravagance. So there will be a lot of unemployed baristas. However, an argument can be made that in tough times, people do without big luxuries but will still buy little luxuries to make themselves feel better. So I’m not saying Starbucks will disappear; I just don’t think there’s really a market for one on every corner. I expect they’ll wind up closing more than half their stores.

More generally, I’d say there’s just too much retail out there.

L: Particularly high-end retail. I wonder how many $1,000 bikes will be sold when people can go to Walmart and get a decent, light-weight aluminum bike for $100 or less.

Doug: And how many closets full of suits and shirts and pants and shoes are out there that people don’t even use? Who’s going to buy clothes when they have more than they can wear and don’t have a job? A lot of that stuff is going to last a long time.

L: So, short Calvin Klein and Eddie Bauer?

Doug: Almost no retail business is a good business today. The only exception I can think of is a grocery store.

L: People are going to need to eat, no matter what.

Doug: That’s really about it.

One business that’s been pretty good over the last decades is the public storage unit business. People have so much stuff, they can’t even fit it all in their garages – which they need for their boats and ATVs – and their attics are overflowing. People simply have too much stuff, and they are going to stop buying it as their wages go down. Maybe eBay is the way to go, as people try to unload some of the stuff they’ve accumulated to raise cash.

Here’s the thing about unemployment: you can’t just think in terms of the U.S. Americans have insanely high wages, relative to people in other countries of equal intelligence, maybe a better education, and definitely a better work attitude.

L: That’s for sure. I had three guests, former students of mine from the Republic of Belarus, who stayed with my family this summer – at the height of the post-crash scare. Everyone was moaning about there being no jobs, but these kids got on the bikes I lent them and rode for many miles every day until they found jobs – at least two each. And these are students who’d never worked a day in their lives, had no experience whatsoever, no training, nothing to put on a resume. But they wanted to work and were eager to exchange labor for dollars.

Doug: What kind of jobs?

L: Kitchen help in a pizza restaurant, stocking shelves in supermarkets, stuff like that.

Doug: In other words, the kind of labor self-respecting Americans don’t want.

L: Yes. You know, leftists complain that globalization is unfair to poor countries – but in fact, modern production is becoming increasingly independent of geography, so pay rates worldwide are trending towards more equality than the world has ever seen. Wages are rising in the third world and dropping in the first. Like it or hate it, it’s capitalism that has been helping the poor around the world, with real, productive work – not socialist government handouts.

Doug: Yes, pay scales are being homogenized. Which is why you can expect places like the U.S. to fight the trend with quotas, tariffs, and the like.

You know, properly speaking, the “correct” level of unemployment is zero. Theoretically, the demand for goods and services is infinite. My own desire for goods and services has no limit, and neither does anyone else’s. So even if everyone worked 24/7, they could never satisfy all the potential demand. It’s just a matter of allowing people to work at wages that others are willing and able to pay.

L: So, it’s minimum wage laws and price controls that create unemployment – there’s no natural unemployment rate in the market?

Doug: Yes. Previously, for many years, the government used to say that the normal or correct rate of unemployment was 6%. How they came up with that number, I don’t know.

L: Probably threw darts at a board.

Doug: Yeah, they picked some number out of the air, found a pliable economist to write a paper with a bunch of mathematical symbols, and it became part of the cosmic firmament. It’s ridiculous. In a free-market economy, there would be zero unemployment or even negative unemployment, as particularly ambitious individuals would have two jobs.

L: Okay, but back to these (forcibly) United States…

Doug: I’m sorry to say, it’s going to get much worse. With 15% of the population collecting food stamps, and another 15% eligible but unaware or unwilling to accept the stigma – yet – and more people accepting various other government subsidies, there will be a growing population that doesn’t want to work. In response, there will be higher minimum wages that will keep more of the unskilled out of work, and more regulations and higher taxes will keep businesses from hiring more people. The government is going to enact lots of new laws, supposedly to protect the employees, and that’s going to make it much riskier to hire anyone. It’s a truly vicious cycle that’s going to cause serious structural unemployment for a long time.

L: You think the government will be stupid enough to raise the minimum wage when businesses are failing left and right?

Doug: Yes, of course they are. I’m surprised they haven’t raised it to $20 or $25 per hour.

L: Sure, why not $1,000/hour – we’d all be rich!

Doug:

L: So, if it’s that bad and getting worse – if the real unemployment rate is just a few percentage points lower than it was during the Great Depression, why don’t we see more lines outside of soup kitchens?

Doug: Well, those people I mentioned getting food stamps – they’re not getting stamps anymore. They get a thing that looks like a credit card. They don’t have to stand in line at any special store or soup kitchen; they can just go down to the nearest Safeway and load up on Twinkies. But I have seen a lot of stuff on YouTube about people living in tent cities. So it’s not as different from last time as you might think – and this time it’s still just getting started. Which reminds me: people in the real estate and construction businesses had better prepare for a long, long drought.

L: I just did a search on YouTube for “tent city” and got 2,660 results. Did you see the one about the uproar over a tent city named Obamaville?

Doug: That’s a good example, and I’m sorry to say that I’m convinced that it’s going to get much worse. There’s no way out for the average person. Except to take stock of his position, hunker down, and figure out what goods and services he can provide others at prices they can afford.

L: Any suggestions for readers?

Doug: Cut down on your standard of living while you can do so in a controlled way – or the market will do it for you. Greatly increase your rate of savings. And be very careful of what you put your savings in.

L: Investment implications? Short retail?

Doug: Yes. Bet against Wall Street, bonds, and after a few months, the U.S. dollar. It’s not a pretty picture.

L: The sort of stuff you cover in The Casey Report.

Doug: Yes, exactly. I wish I could assure everyone that things are going to get better soon. But that’s not the case. This is just the first act. It’s better to be aware of an unpleasant reality than to be blindsided by it.

L: Okay then, another sobering conversation – we’ll have to talk about something more upbeat next week, or we’ll leave our readers too depressed to read us anymore.

Doug: Just remember what Robert Friedland always says: the situation is hopeless, but it’s not serious.

[bread_and_roses]

38. Just a note to Tansy on Margaret Mead and a quick word on Haiti for now

Tansy, I've always thought that Mead got it half right...about that small group of people. Because the only thing I ever see changing the world - in the sociological(for lack of a better word right now) realm, at least - is very large groups of people in concerted action. But - it is usually a small group of committed people who start that ball rolling. The quote has always bothered me, because while honoring the small group it dismisses mass action. But - maybe it amounts to the same thing as what I am saying in the end.

And on Haiti - have those here been listening to Democracy Now reporting from Haiti (Amy Goodman)? Their reporting, and other news bits I've seen (I stay away from TV reportage, can't bear it) have left me in a state of stunned disbelief. NO ONE has been to the epicenter with relief. NO ONE. And all over, including capital, people still are not getting water. Two weeks later. Or analgesics. Or food. Or tents. Or or or or or or or....

Do you mean to tell me that the US military, that boasts of its prowess in killing people (mostly civilians) thousands and thousands away from the trigger - that same military - can't get WATER to the PEOPLE OF HAITI only just off our shores compared to AfPak?

Haiti, in addition to a tragedy of the most horrific proportions, may be a metaphor for us all.

I just finished reading through today's SMW - too much to read it all, just scanning. I might bookmark the thread for the comments about the general state of things, for which Haiti is our dark poster child, I think...

And too much here to digest tonight, even again just scanning and reading first paragraphs - I'll try to get back, it's been a hellish week - the work just keeps piling on National on top of State on top of Local issues (all of which impact even my very low-level organizing type job) I fear for my Labor family, for my own family, for my Brothers and Sisters in Haiti and around the globe, for all of us. I told my husband I was ready to start stockpiling canned goods, so we could feed our g'daughter at least....

But someone said something to the effect that real resolution is to keep on in the face of no hope, and I intend to do so. I just need a rest right now.

peace and solidarity, bread_and_roses.

edit for misplaced parenthesis

[Demeter]

41. The US Is Too Busy Excluding Chavez and Cuba

and any other help of which TPTB disapprove. They truly fear that this catastrophe would have let the Haitians slip the yoke of imperial slavery. As "helpers" liberated Haitians from their rubble and provided food, water, medicine and shelter, they would be breaking the chains provided by multinational corporations and the IMF. And the true horror of Haiti would be revealed to the world.

Can't let that happen. Wouldn't be prudent, as Poppy says.

[Demeter]

42. If You Have Read "The Moon Is a Harsh Mistress" by Robert Heinlein

you will recall that he expressed the opinion that small groups of passionate people can formulate and start things that "go viral" and sweep through a society, leading to immense changes in short time frames. Whereas, starting with large groups leads to frustration, stagnation and deadlock.

(My own personal problem is getting some henchmen or co-conspirators. I don't know how to find them or pick them. And educating them has proven to be a waste of time and energy...)

[Hugin]

79. All you end up with are...

Underachievers, like moi! :7

[Tansy_Gold]

51. A journey starts with a single step, too

Haiti will be Obama's Katrina, whether it is or not. If it is, then it is, and he has no way out. He has no excuses, not even that it was John McCain's birthday. If it wasn't his fault, the RW will make it his fault, and because he has never fought them on anything else, he will not fight them on this and he will own Haiti the way booooosh never owned Katrina.

It is not enough to get a Nobel Peace Prize while you're in the middle of two wars. This is not the Land of Oz and you do not get brains with a diploma or compassion with a testimonial or courage with a medal. This is the real world where tectonic plates shift and people die.

Money is raised and the aid organizations like Médecins sans Frontières and Zanmi Lasante struggle to do what they can. And there stands the US military, "taking charge" and fucking things up even worse.

It's not like earthquakes never happen. It's not like the U.S. has no experience with the devastation of earthquakes. So why the hell are we so unprepared for one? If we can't deal with this in Haiti, what happens if/when a similarly destructive one hits LA or SF? Will it take us two weeks to get aid to a stricken American city?

Who's in charge of PLANNING this shit? Don't disaster-preparedness organizations spend some time in what-iffing? Isn't that the whole point of having them???? What if LAX is destroyed? How will you get supplies to a city of 5 million? DO YOU HAVE A FUCKING PLAN?

Change, change, change. Blah, blah, blah. Obama? Oh, babble. Talk is cheap, even elegant, polished talk filled with complete sentences and subjunctive mood and insubordinate(sic) clauses. Remember how we used to complain that boooosh was in a protected bubble, that he only heard what his handlers wanted him to hear, that no one told him the truth because it might upset him? Does it seem like maybe the same thing is happening to Obama?

I don't know what the answer is. I don't know how to effect the change we thought we were going to get with --- WITH, not "from" -- Obama. I honestly believe the American people are at a point that they would do whatever a truly charismatic leader asked them to do, for good or evil. I also believe many of the people who voted for Obama did so not just to prevent McCain/Palin taking over but because they, too, believed Obama would bring change.

The claims of certain DU cheerleaders notwithstanding, the Obama presidency has not brought change. Too many of the worst policies of the previous administration are still in place, and there is no active lobbying from the White House to change them. DOMA, DADT, torture, spying on Americans, Blackwater, lack of transparency in government, protection for the Wall Street crooks, and on and on and on and on. It's overwhelming, to the point that even the first step becomes difficult, because one doesn't know which direction to take that first step.

A friend of mine and I were commiserating just today about our frustrations and our lack of progress toward certain personal goals. "Do you think we're over-extended?" she asked in an email. "No," I replied, "I think we're over-visioned." We see so many problems that need to be taken care of and we seem to be trying to fix them all at once and not getting anything done. In a way, that same difficulty may be applied to Obama, in that he inherited such a horrendous mess from boooosh. The difference is, my friend and I are trying to resolve our problems by ourselves. Whether it a financial problem or getting an insurance claim settled or finding a good mechanic or a plumber or scrounging up the money to buy a new washer or finding time to get to the lab for pre-surgery blood tests or whatever -- We have to do it without assistance. And when it comes to solving the country's and the world's problems, well, if we can't get the checkbook to balance alone, we aren't going to be able to balance the federal budget alone either.

But that's the point: Obama's not alone. He has staff. He has a vice-president. He has a cabinet. He doesn't have to stop what he's doing in order to fix supper or take a load of laundry out of the washer and put it in the dryer.

It's easy to blame the pukes for Obama's failures, and if he had been putting forth an obvious and strong effort to accomplish the promises he made (or at least implied) during the campaign, then yes, the blame could be laid entirely at the feet of Boehner and McConnell and the rest of that disgusting bunch. But he hasn't made that effort. As far as I can tell, he hasn't held a press conference since July of last year, and that's almost six months ago. That was probably right around the time when the health care reform bill was supposed to be ready before Congress' August recess. We know what happened to that (implied) promise.

Where are the administration surrogates? Where's Biden? Where are the cabinet members? We get Gibbs and Axelrod on a fairly regular basis, but where are Sebelius and Locke and Solis? Shouldn't they be speaking out in as many fora as possible about the importance of health CARE reform to the nation's economic interests? For those who don't want Obama to be a dictator and tell Congress to give him what he wants, why isn't he using the power of the executive branch, including his cabinet, to lobby for his issues? That's part of what they're supposed to do!

Geithner has to go, and along with him Summers and Rubin. Maybe that's the first step. Or as someone's sig line says "First you have to admit you're an asshole." It's difficult, as most of us know, to admit you've made a mistake. (I, personally, wouldn't know, since I have never made a mistake. ha ha ha :sarcasm: and :rofl:) But you can't fix something unless you admit it's broken. And this administration is, like the Norwegian blue, ceased to be, expired and gone to meet its maker, a stiff, bereft of life. It's leadership processes are now 'istory, it's off the twig, it's kicked the bucket, shuffled off its mortal coil, run down the curtain and joined the bleedin' choir invisibile. It's like a dysfunctional family, going through the motions but without any unity of purpose. Indeed, almost without any purpose at all. It's like a romance novel in which the whole book is about whether or not the lovers will ever become a couple and live happily ever after. Well, usually by "The End," they've gotten together, but that whole happily ever after thing is just taken for granted. The reader never really sees how the relationship works out. And since there's been conflict in the courtship, it's not likely that there won't be some amount of incompatibility.

The Obama campaign was kind of like that, kind of fairy-tale-ish, and that happy ever after thing just seemed to go along with it. But this isn't a fairy tale and the happy ever after isn't automatic.

So what should the first step be? Well, it depends on whether you mean MY personal next step, or Obama's. It would be easy for me to give him advice, and of course I have absolutely no expectation taht he would follow it. But my personal first step can't be to fire Geithner, Summers and Rubin, and my next step can't be to call a cabinet meeting and tell Sebelius to start putting together hard data on what universal health CARE would really cost if we got rid of the insurance companies, to tell Solis to meet with the heads of the major labor unions and find out what suggestions they have for rebuilding the U.S. manufacturing base, to tell Gary Locke and Ron Kirk to produce a report detailing the costs in terms of lost tax revenues, etc., of continuing trade agreements such as NAFTA, WTO, etc.

How do you ride all the horses on the merry-go-round at once -- alone?

I don't know. I'm not sure where to start.



Tansy Gold

[hamerfan]

89. TG for POTUS! n/t

[Hugin]

97. Golly!

You've really got to stop burying these posts in the middle of a dense thread, Tansy!

Okay, I'll admit it... I'm an asshole. Not like anyone didn't know that already. :)

[EmeraldCityGrl]

104. +1000 outstanding rant.

[bread_and_roses]

136. As EMG said above, outstanding indeed

We're on the same page Tansy, even if I have a minor quibble over MM's words (I admit, I'm not a big fan of hers, though I'm sure she did some good work.)

I just read this:
http://www.thenation.com/blogs/thebeat/521020/unions_can_t_compete_with_corporate_campaign_cash

The AFL-CIO actually filed a brief in the Citizens United case that urged removal of reasonable restraints on campaign spending.

Indeed, an attorney who prepared the amicus brief for the AFL-CIO recently participated in a conference call talking up the merits of the corporate position, along with representatives of the conservative Heritage Foundation and Senate Minority Leader Mitch McConnell, R-Kentucky. The AFL-CIO actually filed a brief in the Citizens United case that urged removal of reasonable restraints on campaign spending.

Talk about utter idiocy. I'm sure they were thinking of getting some of the unbelievably onerous burdens on unions trying to do campaign spending of any sort lifted...but that they did not have more sense than to expect to get monumentally screwed by this Court - or that they did not have the courage to support what we really need - which has nothing to do with how much entities can spend or how, and everything to do with eliminating to the maximum extent possible ALL $$ influence on elections ....goddess, I despair.

[DemReadingDU]

143. That was great!

and, I think we should add Bernanke to the list to be replaced too.

[Demeter]

39. Want to Exercise Your Spleen? Read This!

http://www.informationclearinghouse.info/article24477.htm

How to Squander the Presidency in One Year

Hey, Conan Obama: How About Now? Can You Hear Us Now?

By David Michael Green

[Demeter]

40. For a More Dispassionate Post-Mortem

http://www.informationclearinghouse.info/article24466.htm

Obama Disconnected

[Demeter]

43. My Spleen is Exhausted

We'll pick this up in the morning. Get some sleep everybody, we are going to need it.

[Dr.Phool]

48. Yeah, that ole Barry has it down, don't he?

[AnneD]

50. The radicalization of the Democrats....

or Boston Tea Party, the sequel-and if I am not mistaken-they dressed up like Indians. No tea bagger jokes either. :spray:



Seriously, here are some lessons learned


Ghost Dancing and Wounded Knee

www.youtube.com/watch?v=GC42z0cCf_U&feature=related


The Lakota have never really recovered. They went to the Rez kicking and screaming. Wounded Knee really took the heart out of them. Yes, we had a trail of tears but this was just as bad.

[Demeter]

54. Where will the next crisis hit? Commentary: This market is filled with land mines

http://www.marketwatch.com/story/where-will-the-next-crisis-hit-2010-01-23?siteid=YAHOOB

It's official: The worst of the financial crisis is over. That's what the World Bank said in its 2009 annual report, released Wednesday.

But that doesn't mean it's completely behind us.

The after-shocks of the subprime meltdown and the collapse of Lehman Brothers in September 2008 continue to ripple through the financial system and the global economy.

Two weeks ago, I predicted that there would be a "financial mini-crisis or two that ignites investors' fears" in 2010. It would be "worse than Dubai, but nowhere near as bad as the fall of Lehman," I wrote. Read Six big predictions for 2010: http://www.moneyshow.com/investing/articles.asp?aid=EDITOR-18632&scode=012268

So, where could it take place? I called Carmen M. Reinhart of the University of Maryland to find some likely candidates.

Professor Reinhart, of course, is one of the world's leading experts on financial crises. Along with Kenneth S. Rogoff of Harvard, she wrote "This Time Is Different: Eight Centuries of Financial Folly," as definitive an account of financial crises as you'll find.

Her view: The next flare-up is most likely to take place far away, or very close to home.

In their book, Reinhart and Rogoff show that a rapid build-up of borrowing is a necessary precondition for financial crisis, and the biggest problem in cleaning them up. Debt, debt, and more debt piled up in the good times becomes an albatross on borrowers and lenders alike when the wheel turns down.

"The fuel of bubbles is liquidity and credit risk," Reinhart told me.

And this bubble was way off the charts. Households and companies amassed an astonishing amount of debt in the years before the crisis, and the depth of the crash compares with only the most severe financial crises, including the Great Depression.

Following the explosion of private debt in the 2000s, mostly connected with housing in several countries -- the U.S., U.K., Spain, Ireland, and others -- governments poured monumental amounts of taxpayer funds into preventing another 1929.

Governments accomplished that, but at a big price: horrendous sovereign debt hanging over most of the developed world. That could cause wrenching financial pain and subpar economic growth for years to come.

Which is why Reinhart sees some of the marginal debtor nations as among the most vulnerable.

Take Iceland. The tiny Nordic nation best known for its long nights and salted fish was turned by some financial cowboys into a giant leveraged hedge fund, and its currency became a favorite of speculators.

When the roof fell in, the value of the krona disintegrated and output plunged. According to Reinhart, Iceland's total external debt is now a mind-numbing 924% of GDP, and half of that is short term.

Now, British and Dutch authorities are trying to collect over $5 billion from Iceland's treasury to repay depositors from those countries who took a flyer on high-yielding Icelandic accounts. That amounts to 50% of Iceland's GDP. Read "How the Icelandic saga should end.": NEXT POST

Iceland's president put the issue up for a popular vote, which takes place March 6th. "It's a referendum on whether they're going to default," said Reinhart.

If, God forbid, there were a similar crunch here, how many Americans would vote to repay, say, China trillions of dollars for U.S. deposits that had plummeted in value? So, don't be surprised if Iceland's voters turn thumbs down, possibly putting a $10 billion multinational rescue plan in jeopardy.

And then there's Greece, a nation which is the opposite of Iceland in almost every way, except for their great heroic myths and sagas -- and financial profligacy.

The country, part of the Euro zone, has seen its debt balloon to a projected 12.7% of GDP this year -- one of the world's highest. The Socialist government has pledged to cut that to below 3% of GDP by 2013, but hasn't spelled out how. "They've been lying consistently about their fiscal ," said Reinhart.

Maybe that's why Greece's bond market saw a big sell-off Thursday, with yields soaring along with prices of insuring Greek sovereign debt against default.

The euro also has been sinking against the dollar, in part because of fears about a debt crisis sparked by Greece. Could we be in one already?

Other possible flash points: Portugal, which the International Monetary Fund just warned about its deteriorating fiscal situation, and economically depressed Spain, whose official unemployment rate approaches 20%. Read more about Portugal's deficit: http://www.reuters.com/article/idUSLIS00228820100120

"Ireland is another one that concerns me," said Reinhart. (Its debt-to-GDP ratio tops 700%.) She's also looking at Eastern Europe, particularly the Baltic states (Estonia's external debt is 140% of external debt, she said), Hungary, and Romania, whose debt is a whopping 160% of GDP.

Of course, these are small, peripheral countries whose problems are no secret to investors. "Was Thailand central to the world economy in 1998?," asks Reinhart. "Was Russia?"

A crisis in these "peripheral" nations could increase the strains on the euro and drag down stronger economies with them.

MoneyShow.com columnist Jim Jubak said even the United Kingdom may be vulnerable to a crisis. That, of course, would be at least as big as Lehman.

But you don't have to go very far. Right here in the U.S., we have some serious debt problems that could flare up into crises. And I don't mean the federal government, whose huge debt can be underwritten by the Federal Reserve's running the printing presses, at least for now.

Reinhart is worried about big debt at the "subsovereign" level--state and municipal governments, which are on track to run up $370 billion in deficits over this fiscal year and next. She foresees credit crises in that area, too.

Actual municipal bankruptcies are pretty rare, although some of you might recall the brief defaults of New York City and Cleveland in the 1970s, as well as the actual Chapter 9 bankruptcy filing of Orange County, Calif. in 1994.

In her book, Reinhart points out in the late 19th century 10 U.S. states were in default, and she wouldn't be surprised to see that happen again to some states or municipalities.

"I think these things are more likely now than they have been in a long, long time," she said, defining default as "anything that changes the original contract to less favorable return to the lender."

How about our largest state, California, with its $20-billion deficit?

"California and Greece have a lot of similarities," said Reinhart.

And could Arizona, Nevada, New York, New Jersey, Illinois, or Michigan be far behind?

Personally I would expect the fallout from incidents of this kind to be brief: The Orange County bankruptcy didn't stop the market's rise in the mid-1990s. In fact, any resulting sell-off could become a buying opportunity -- as long as the crisis is contained.

What happens next is anyone's guess, but it just shows there are plenty of land mines in this market, and you have to watch where you're going. As they used to say on that great cop show of the 1980s: Be careful out there.

Howard R. Gold is executive editor of MoneyShow.com . The views expressed here are his own.

[Demeter]

55. How the Icelandic saga should end

http://www.ft.com/cms/s/0/ca8f222e-0141-11df-8c54-00144feabdc0.html?nclick_check=1

Iceland is famous for its sagas. But the latest one is truly dramatic: the balance sheets of its privatised financial sector grew from twice to 10 times gross domestic product, in five years. In the absence of a lender of last resort, this story had to end badly. In the panic of 2008, it did.

Because Iceland was a member of the European Economic Area, its banks were allowed to set up branches freely. To raise money, Landsbanki, one of Iceland’s now collapsed banks, set up an internet bank, Icesave, which gulled depositors by offering attractive interest rates. Under the European Union directive, Iceland also had an obligation to establish a deposit insurance scheme, which it did, through a levy on those banks.

Then came the collapse. Some Icelanders blame Gordon Brown, Britain’s prime minister, for pulling the plug on their banks. That is unreasonable. Competent observers had long concluded that the financial system was a house of cards. It was sure to collapse in a panic. Less unreasonable is the complaint over the UK’s use of a section of its anti-terrorism laws to freeze assets. But some such action was justified.

Since the banks had turned Iceland into a hedge fund, with massive short-term foreign currency liabilities used to finance risky long-term assets, the economy was doomed. According to the September 2009 economic survey by the Organisation for Economic Co-operation and Development, between 2007 and 2010 the fall in real consumption will be close to a quarter and that of domestic final demand almost 30 per cent. This is a depression. The burden of debt and loss of purchasing power are worsened by the collapse of the krona, which has lost more than half its value against the euro since July 2007.

So far, so bad. But, for ordinary Icelanders, it gets even worse. The British and Dutch governments take the view that the taxpayers of Iceland have a duty to refund the amount promised by Iceland’s collapsed deposit insurance fund. The total claimed by the UK is £2.35bn and by both countries together €3.9bn. The latter is now some 50 per cent of Iceland’s shrunken GDP. In the UK context, this would be equivalent to a demand for £700bn. It is not hard to imagine how far Mr Brown would get with a suggestion that the UK should accept such a debt to refund depositors in foreign branches of bankrupt UK banks.

This, then, is the background to the decision by Olafur Ragnar Grimsson, Iceland’s president, to put the latest version of an agreement negotiated under duress to a referendum. Lord Myners, the UK’s City minister, has stated that if the Icelandic people were to reject the deal, they would “effectively be saying that Iceland does not want to be part of the international financial system”. After their recent painful experiences, Icelanders may wonder why that is so worthwhile. But without agreement to repay, a $10bn rescue plan funded by the International Monetary Fund and Nordic countries is now in doubt.

So do the ordinary Icelandic taxpayers have a legal obligation to meet the liabilities of their collapsed deposit insurance fund? The answer to that is, to say the very least, that it seems to be very far from evident. Moreover, any British or Dutch depositors who thought their money was safe because the government of Iceland guaranteed it were mad.

Do Iceland’s taxpayers have a moral obligation to pay this loan? My view is: no. The delusion that finance was the path to riches was propounded by countries that should have known far better. I cannot blame Icelanders for succumbing. I certainly do not want generations of Icelanders to bear the cost.

The final and, in truth, most important question is whether these demands are reasonable. After all, in every civilised country it has long been accepted that there is a limit to the pursuit of any debts. That is why we have introduced limited liability and abolished debtors’ prisons. Asking a people to transfer as much as 50 per cent of GDP, plus interest, via a sustained current account surplus is extraordinarily onerous.

Against this, the UK government argues that it is offering a lengthy grace period and an interest rate that is close to the cost of funding for the UK Treasury. It also argues that as much as 90 per cent of the repayment it seeks could come from liquidation of Landsbanki’s assets.

Yet the obvious answer to the latter point is this: if the assets of the bank are that valuable, why not write off the debt, in return for the claims on these assets? That would be a generous gesture. It is, more importantly, one that would do much to improve the morale of a battered and vulnerable little country. Threatening such a country with destruction, as Lord Myners has done, is simply shameful. The UK and the Netherlands should stop this self-righteous bullying at once.

Yet they – and everybody else – must learn the really big lesson here. The combination of cross-border banking with generous guarantees to creditors is unsustainable. Taxpayers cannot be expected to write open-ended insurance on the foreign activities of their banks. It is bad enough to have to do so at home.

[Demeter]

56. The Obama Collection

Bits and Pieces about the 44th President's current dilemma

White House nightmare persists

http://www.ft.com/cms/s/0/821dce96-0786-11df-915f-00144feabdc0.html

At the end of Barack Obama’s worst week since taking power a year ago, the US president’s fortunes look set only to deteriorate over the coming days. Following the shock defeat of the Democratic candidate in Massachusetts on Tuesday, a move that deprived the president of his 60-seat super-majority in the Senate and left his legislative agenda in tatters, Mr Obama has just four days to reboot the system.

The US president had originally delayed next week’s State of the Union address to Congress in the hope he would get his signature healthcare reform bill enacted in time. That prospect, already waning, was killed dead by the voters in Massachusetts. A growing number of Democrats believe the nine-month effort could collapse altogether.

The death of the healthcare effort would rob Mr Obama of what he had hoped would be the centrepiece of his first State of the Union message. “It now looks extremely difficult, if not impossible, to get anything resembling a broad healthcare bill out of Congress,” said Scott Lilley, a senior fellow at the liberal Centre for American Progress, the think-tank that is closest to the White House. “In his State of the Union, Obama has to slim down his ambitions. It should be short and simple and focus on jobs.”...

...Worse, most people do not think Mr Obama can even command unity within his own administration on the Wall Street proposals amid growing speculation about whether Tim Geithner, the Treasury secretary, can survive in his job. Mr Geithner was conspicuously sidelined during Thursday’s announcement by the presence of Paul Volcker, the former Federal Reserve chairman, who lent his name to the push to rein in Wall Street banks.

The speculation about Mr Geithner is only likely to grow. “The Obama proposals were clearly politically motivated and came from the White House not the Treasury,” says a Democratic adviser to the administration, who withheld his name....

Obama’s bank plan is a start

http://www.ft.com/cms/s/0/1705ff00-0774-11df-915f-00144feabdc0.html

Adam Smith recognised in The Wealth of Nations that the rationale for restricting financial institutions from unlimited leverage and trade stemmed from the negative effects their failures imposed on the rest of the system: “The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed ... Those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as of the most despotical.”

And here we are. The Obama administration has adopted the “Volcker rule” and proposed that walls be built around the proprietary trading party enjoyed by US banks, especially the large and the complex ones, so that when the party catches fire, it does not spread to commercial banking activities such as payments and settlements and lending to the real economy.

Unfortunately, the timing of the announcement distracts even the most astute observers from taking the proposal seriously. It is simply too tempting to denounce it as a populist measure void of any economic rationale. Such denouncement, however, might itself be somewhat populist. It is useful to sift out the politics and evaluate the proposal first and foremost on its economic merits.

Those who argue that proprietary trading did not contribute to the crisis of 2007-09 have not understood what caused the crisis. In a nutshell, large and complex financial institutions took a one-way, highly geared bet on credit, especially tied to securitised pools of residential non-prime mortgages. Many of these securities were originally intended for marketing to Norwegian pension funds and suchlike. But banks were never fully successful in this intended purpose. And when these institutions realised that they earned a nice “carry” (ie premium) due to the aggregate nature of their risk, their illiquidity and the low cost of the short-term debt with which they were financed, they went all-in. When the market and liquidity risk materialised as a result of the collapse of housing prices, they had no capital cushion to bear it. Many of these institutions were so large that there were no easy bankruptcy procedures to resolve them nor any way of ensuring that they continue to operate the country’s financial plumbing while in bankruptcy. Of course they were bailed out.

Both government guarantees of financial sector debt and the lack of Glass-Steagall-style restrictions on the scope of the banks’ operations contributed to the build-up of this systemic risk.

The main focus of financial reform should be to address such systemic risk. Separating commercial banking and other forms of financial intermediation from proprietary trading is a step in the right direction, since it limits systemic risk without affecting the financial sector’s ability to perform its core functions. This is because there is little evidence of any economies of scale that argue persuasively for principal investing to be located inside a financial conglomerate. In fact, the primary advantage appears to be that these institutions become too big to fail, and end up with access to a low cost of funding as a result of government guarantees. But, as seen from this crisis, the direct and indirect costs of government forbearance in a systemic crisis can be huge.

Therefore, there is an economic rationale for narrow banking that restricts the types of exposures that could be built up, such as proprietary and directional trading, equity investments (both using the bank’s capital and implicitly through any asset management business it has) and structured asset-backed securities, which were always intended to be passed on to the capital market at large. These other activities would be spun off to asset management groups and would be subject to whatever regulation is necessary for those types of institutions.

Separating proprietary trading and asset management from other banking activities will reduce the likelihood of bailing out speculative desks (inside banks) when they fail, subjecting them to greater market discipline and creative destruction, as is the case with the hedge fund industry. Once separated, we will be left with commercial banks and other large – but somewhat narrow – financial institutions as the most critical ingredients of the financial plumbing. These institutions are likely to continue to enjoy at least some government guarantees but, with restrictions on their scope, it will be far easier than it has been recently for the regulators to charge them correct risk-based capital requirements. It is hard to regulate an institution whose full range of activities no one truly understands, in many cases including top management of the institution...

[Demeter]

57. Bernanke under pressure

BEN SHOULDN'T BE THE ONLY ONE, IMO

http://www.ft.com/cms/s/0/3831df1c-0780-11df-915f-00144feabdc0.html

Ben Bernanke’s prospects for a second term as Federal Reserve chairman were thrown into doubt on Friday as the Obama administration scrambled to shore up faltering support among Democrats in the Senate.

Congressional critics of Mr Bernanke, some fearful for their own re-election prospects and others critical of the Fed’s management of the financial crisis, moved against him, adding to a list of proclaimed no votes.

Democratic senators Barbara Boxer from California and Russ Feingold from Wisconsin, said that they would oppose Mr Bernanke in a vote that has been promised before the end of his term on January 31.

Mr Bernanke needs 60 votes to secure confirmation as a result of procedural blocking tactics.

Donald Kohn, the Fed vice-chairman, would serve as interim head of the bank if Mr Bernanke’s confirmation were rejected or delayed.

Other names circulated as possible permanent alternatives have included Mr Kohn, Lawrence Summers, the president’s adviser, and Alan Blinder, the Princeton University economist.

JEEZ! WHY NOT GET A HEADHUNTER? ANYBODY BUT THOSE CLOWNS!

White House and Treasury aides said that President Barack Obama and Tim Geithner, Treasury secretary, were confident that Mr Bernanke would be confirmed by the Senate five months after the president announced his renomination.

Earlier, the vote of Harry Reid, Democratic leader in the Senate, had appeared to be in doubt, but he issued a statement that said: “While I will vote for his confirmation, my support is not unconditional.”

Economists warned that a rejection of Mr Bernanke could be seen as a threat to the central bank’s independence. US Treasury yields were little changed but stocks fell more than 2 per cent.

“A No vote on Bernanke would be viewed by markets as adding yet another uncertainty in an already fluid economic and policy environment,” said Mohamed El-Erian, chief executive of Pimco, the world’s largest bond investor.

Chris Dodd, the chairman of the Senate banking committee, said a No vote would send the economy into a “tailspin”.

Mr Obama Friday made a defiant speech in Ohio at the end of a week in which he promised to fight for healthcare reform and Wall St regulation.

SOMEHOW I REALLY DOUBT THAT BERNANKE'S FATE CAUSED A 500 POINT LOSS ON THE DOW....

[Demeter]

110. I Think This Govt. Post Should Be Subject to Competitive Examination

of something OTHER THAN who you know....

[Demeter]

58. Could Goldman Sachs with one bound be free?

http://blogs.ft.com/gapperblog/2010/01/could-goldman-sachs-with-one-bound-be-free/

I write in my news column for the FT on Friday

http://www.ft.com/cms/s/0/2c6cbcb8-06bf-11df-b426-00144feabdc0.html

about the “Volcker rule” - Barack Obama’s attempt to repeat some kind of Glass-Steagall structural reform - that Goldman Sachs would almost certainly be caught by it, along with commercial banks.

But I had second thoughts after listening to CNBC interview with Barney Frank, chairman of the House of Representatives Financial Services Committee, and reading what my colleagues Krishna Guha and Paul Murphy had to say.

In my column, I say:

The “Volcker rule” that would not only limit proprietary trading at deposit-taking institutions but stop them from “owning, investing or sponsoring” hedge funds and private equity funds has some ambiguities.

On the face of it, it might allow holding companies such as Goldman and Morgan Stanley to evade the restrictions by shedding their relatively small deposit-taking activities.

Yet so great is the unpopularity of Goldman and Wall Street that it seems inconceivable that Congress will allow them to escape, while deposit-taking “Main Street” banks such as JPMorgan Chase and Bank of America are caught by the rule.

Mr Frank, however, was much less clear. He suggested that Goldman could escape by giving up its New York state bank charter, through which it raises retail deposits:

“With regard to Goldman, they will probably sell their bank charter and that’s an artificiality anyway. Give it up, I don’t mean sell it.”

I agree that, if Goldman has a choice between giving up its bank charter and divesting its private equity and hedge fund operations, there will be no contest. But it strikes me as extremely strange, not to say wrong in principle, that it could shrug off the rule so simply.

Goldman would, after all, remain a financial holding company, regulated by the Federal Reserve and with access to the Fed discount window in emergencies. It would also stay a systemically important financial institution (aka too big to fail), like large commercial banks.

Mr Volcker appears to be most worried about not permitting deposit-taking institutions to own “casino” operations - proprietary trading desks, hedge funds and private equity funds.

But Mr Obama clearly cast the reforms in a wider context - not allowing any institution that implicitly depends on US taxpayers for support - to take excessive risks:

“Never again will the American taxpayer be held hostage by a bank that is too big to fail . . . When banks benefit from the safety net that taxpayers provide, which includes lower-cost capital, it is not appropriate for them to turn around and use that cheap money to trade for profit.

“We cannot accept a system in which shareholders make money on these operations if a bank wins, but taxpayers foot the bill if a bank loses.”

Note that he kept referring to taxpayers, not to depositors. That did not sound like a pledge to rein in JP Morgan and Bank of America while letting Goldman and Morgan Stanley go free.

The Wall Street Journal’s story, for example, assumes that Goldman and Morgan Stanley are among the institutions affected. We shall see.

[Demeter]

59. Corporate Personhood Should Be Banned, Once and For All By Ralph Nader

http://www.informationclearinghouse.info/article24478.htm

January 21, 2010 - -Today’s decision by the U.S. Supreme Court in Citizens United v. Federal Election Commission shreds the fabric of our already weakened democracy by allowing corporations to more completely dominate our corrupted electoral process. It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations. With this decision, corporations can now also draw on their corporate treasuries and pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars.

This corporatist, anti-voter decision is so extreme that it should galvanize a grassroots effort to enact a Constitutional Amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics. It is indeed time for a Constitutional amendment to prevent corporate campaign contributions from commercializing our elections and drowning out the civic and political voices and values of citizens and voters. It is way overdue to overthrow “King Corporation” and restore the sovereignty of “We the People”!

[Demeter]

60. Fed Secrecy Claims Bogus, Redacted AIG Bailout Details Already Public

http://www.nakedcapitalism.com/2010/01/fed-secrecy-claims-bogus.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


By Thomas Adams, an attorney and former monoline executive, and Yves Smith

In September 2008, the Federal Reserve bailed out AIG, and ever since then, controversy has swirled around the motivation and terms of the bailout. A major part of the bailout funds went directly to three banks: Goldman Sachs, Merrill Lynch, and the French bank Société Générale (SocGen). These banks were holding CDS insurance from AIG on toxic assets, and the bailout saved them from the damage they would have suffered if AIG had gone bankrupt and that insurance had become worthless. The assets in question were then stuffed into a financial vehicle called Maiden Lane III, where they remain to this day, administered by BlackRock on behalf of the government.

The bailout has raised enduring questions about the propriety of US financial system governance. A recent article in the online version of France’s leading newspaper Le Monde highlighted the two main theories currently circulating on why the bailout was so generous to a small group of banks. One idea holds that the political connections of Goldman Sachs were a key reason for the bailout. At the same time, it appears that the French regulatory authorities intervened on behalf of the French banks SocGen and Calyon by claiming (speciously) to the Fed that those bank directors would face prison time if they accepted anything less than a 100% bailout.

Attempts to investigate have slammed into a wall of secrecy. The Fed is still fighting Freedom of Information Act requests to disclose the beneficiaries of its various emergency rescue programs The central bank has refused to release details about how the banks benefited from the AIG bailout, even taking the impressively circuitous route of getting AIG itself to beg the SEC for permission to strike key information about Maiden Lane III from its regulatory filings.

The SEC agreed to let AIG keep Maiden Lane III information secret until 2018, since it “qualifies as confidential commercial or financial information.” The Fed argued earlier this week that “If such information were to become available to traders in such securities, traders would be able to use such information to their advantage, and undercut the ability of Maiden Lane III to sell those assets for the maximum total return, to the detriment of taxpayers and AIG.”

We now show that this argument is worthless. Nearly all of the deleted information can be reassembled from sources that are publicly available. The traders whom the Fed professes to find worrisome have access to far more information.

In June 2009, CBS News publicized a memo by AIG Financial Products Vice President Andrew Forster dated November 27, 2007. It listed various assets (to be specific, collateralized debt obligations – CDOs), almost entirely residential real-estate related, on which AIG had received collateral calls and was negotiating with counterparties (http://www.cbsnews.com/stories/2009/06/23/cbsnews_investigates/main5106672.shtml). Most, perhaps all, of those deals, presumably the weaker ones, wound up in Maiden Lane III, along with a comparatively small amount of commercial real estate CDOs.

Between this memo and information provided on the Fed’s website about individual commercial real estate CDOs in Maiden Lane III (http://www.newyorkfed.org/aboutthefed/annual/annual08/MaidenLaneIIIfinstmt20
09.pdf), the very same transaction details that the Fed pushed AIG to omit are already in the public domain: the names and par amounts of virtually all of assets sold to Maiden Lane. And from that information, someone who understands these sorts of deals can fill in even more details, still using only publicly available sources.

We have done this work. A professional at valuing CDOs reviewed the methodology and results. We discuss the construction of the model in greater detail today at Naked Capitalism and provide a link to sections of the most recent model run.

The ease with which we were able to carry out this analysis shows that keeping information away from predatory traders cannot have anything to do with the Fed’s anxiety to keep the Maiden Lane III data hidden. There must be other reasons for secrecy.

An examination of our data raises troubling questions about how the Fed is valuing the Maiden Lane III assets. The Fed claims that in the second and third quarters of 2009, the CDOs in Maiden Lane III rose in value. But our data shows that most of the portfolio is rated junk, and some of the part that is not junk has been downgraded significantly during this period. Moreover, the Fed’s disclosures show that paydowns on these assets accelerated sharply in Q2 and Q3. As discussed at greater length earlier this week at Naked Capitalism, all likely explanations for increasing paydowns imply further reductions for the value of the Maiden Lane III assets. With a weak and worsening portfolio, little to no improvement in the prices of severely distressed mortgage assets, and paydown figures implying additional decreases in asset values, how can Maiden Lane III possibly be reporting rising asset values?

Our analysis raises further questions about the bailout. The data shows that many of the CDOs were packaged by one bank and then the insured portion ended up with another bank. For instance, Goldman had insurance not only on deals it created, but also CDOs from seven other banks.

Many commentators have commended Goldman on the cleverness with which the bank successfully shorted the mortgage market. But why, then, does it seem from the data as if Goldman was systematically trying to increase its exposure to AIG?

And why is there such a pronounced connection between Goldman and the French bank SocGen, the two biggest AIG counterparties and two institutions which have in the past been associated (separately) to the decision to bail out AIG?

Probably the only way to resolve these questions and, incidentally, restore some measure of credibility to US financial governance is to press for additional information.

When the Swiss bank UBS was bailed out by its government, it was forced by its regulators to release a detailed report on how it had blown itself up. What great service for the country have our banks performed that justifies letting them to shroud their actions in obscurity?

After the Great Crash of 1929, the Senate created a commission to investigate the causes of the meltdown. The commission was completely ineffective at first, and was widely viewed as a whitewash. It was only after the commission had run through three chief counsels and had been energized by the contributions of Ferdinand Pecora that it started to make waves. The discoveries of the Pecora Commission led to a financial regulatory system that was admired around the world for the next forty years.

The Financial Crisis Inquiry Commission needs to use its subpoena powers to compel the banks in question to dump emails and documents into the public domain. At that point, it will be possible for independent observers to work with that information and come to their own conclusions about how the global economy went into cardiac arrest. If there are bodies buried, exhume them. Having a functional financial system is more important than helping powerfully placed, undeserving parties avoid embarrassment.

Andrew Dittmer and Richard Smith contributed to this articl

WELL, I WOULDN'T BE IN GS EXECUTIVES' SHOES, NOR ANY OF THEIR ALUMNI, FOR ALL THE GOLD IN FORT KNOX. KEEP DIGGING, YVES!

[Demeter]

61. Millions Against Monsanto by OrganicConsumer

http://www.dailykos.com/story/2010/1/10/823719/-Millions-Against-Monsanto

After years of complaints from the Organic Consumers Association and our allies, the Department of Justice is investigating how big biotech and food corporations, including Monsanto, are monopolizing and controlling our seeds, food and farming. On November 13, 2009, the Obama Administration opened a public comment period that closed on December 31, 2009, seeking comments and information about how corporate control of the food system affects average Americans. Organic Consumers Association members concerned that Monsanto and Big Food corporations have inordinate and dangerous power over where our food comes from and how it's produced, sent 8954 letters to the Department of Justice last month. Here's a bit of what they had to say:

SEE LINK

[Demeter]

62. BUT THE SPLEEN VENTING AWARD GOES TO:

http://www.3quarksdaily.com/3quarksdaily/2010/01/whats-wrong-with-america-were-cowards.html

THIS IS A MUST-READ. IN HONOR OF THIS STUPENDOUS EFFORT AT PURGING, I HAVE INSTITUTED A NEW RATING SYSTEM/REWARD SYSTEM.

THIS POST GETS 10 COUNT THEM, 10

:wtf: :wtf: :wtf: :wtf: :wtf: :wtf: :wtf: :wtf: :wtf: :wtf:

[Demeter]

63. A Bomb Squad for Wall Street By WILLIAM D. COHAN

http://opinionator.blogs.nytimes.com/2010/01/21/a-bomb-squad-for-wall-street/

A FAR LESS EMOTIONAL SPLEEN VENTILATION EXERCISE. OF COURSE, IT APPEARED IN THE NYT...

IT LOOKS LIKE 2010 WILL BE THE YEAR OF THE SPLEEN.

[AnneD]

98. Long but worth it.......

When daughter was a teen, moral situations kept popping up. I was distressed by her choices. I worried about her moral compass. After much thinking, I had a talk with her. I told her that through out her live she would have these moral pop quizzes. They always revealed your moral character. She kept asking me what she should do in this instance and or that. I told her I couldn't advise her in every incident (that was what her compass was for) but before she she did something she should ask herself-would I be proud to tell my Mom and could she honestly face herself in the mirror. It is not always easy to do the right thing but listen to that still small voice. The more you do, the louder that voice gets.

I think some of these folks have not only failed their moral pop quizzes, they killed off that still small voice long ago. I hope that I live long enough to see Karmic Justice , because sometimes we don't see it on Justice on Earth. Now THAT I did learn from my elders. They are very proud of the fact they and their ancestors took the white man to his own courts and beat him at his own game. I remember Chief Dan George's line The Outlaw Josey Wales when someone snuck up on him -it was easy to sneek up on him because he was a Cherokee, he was a civilized Indian.

[Demeter]

64. AND IN THE CATEGORY OF BEATING A DEAD HORSE:

http://www.nytimes.com/2010/01/22/business/economy/22modify.html?ref=business

Treasury Weighs Fixes to Foreclosures Program By PETER S. GOODMAN

[bread_and_roses]

65. Holy Hannah - look what AFL-CIO put up on their blog

http://blog.aflcio.org/2010/01/22/hey-democrats-remember-us/#more-24871

In a lot of ways, the first paragraph is the most astonishing

“Jeff, you guys at the Union Hall aren’t listening to us! You’re talking out of both sides of your mouth. We’re fighting the benefits tax, and now you’re telling us to vote for someone who will tax our benefits! The guys here are voting for Scotty Brown.”

That was just one of the calls and e-mails that I received during the week before the Senate vote in Massachusetts. An AFSCME delegate to our labor council calculated the impact of the Obama tax on union plans and e-mailed us all to “Vote Brown!”

Further down the column is the obligatory tribute to:

The exemptions and improvements negotiated by AFL-CIO President Trumka and others were heroic—and they helped.

but this is quite over-shadowed - I think - by the implied criticism of that same "deal" in the account of the memberships rejection of it as a satisfactory solution to an abysmal betrayal by Obama and the Ds.

Truely, I am astonished - maybe our "labor leaders" will start to get a clue too - a clue that inside-the-beltway-buisiness-as-usual (which is what that deal was, to my mind) ain't gonna cut it in these times. Or lets hope so, at least. But then, we've all had a good dose of where "hope" gets us this last year, haven't we?

[Demeter]

69. I Don't Blame Them

But Obama is still trying to have it both ways...

[Demeter]

66. Bankers are as valuable as film stars or athletes, insists Goldman Sachs director

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/jan/05/goldmansachs-banks

We mere mortals need to shape up our thinking. Goldman Sachs' employees are so special that they ought to be viewed in the same category as professional athletes and movie stars, according to a board member of the Wall Street behemoth.

Bill George, a former boss of the medical technology firm Medtronic who has been a Goldman Sachs director since 2002, has delivered a curious defence of the bank's likely payout of $22bn to its employees for 2009 in an interview with a video website, BigThink.com.

"The shareholder value is made up in people and you need the people there to do the job, says George, at about the 2 mins 40 mark in this clip. "If you don't pay them for their performance, you'll lose them. It's much like professional athletes and movie stars."

As far as I'm aware, it's the first time that anyone on Goldman's top floor has gone quite this far. He is implying that a Goldman trader has just as much unique talent as a Wayne Rooney or a Sigourney Weaver - and that the average employee's expected haul of more than $700,000 is fair.

But George then goes off on another riff, saying he can't help it if film stars, athletes and bankers are overvalued by society en masse.

"I can't justify the relationship between a trader's bonus and what a schoolteacher makes, for instance. I mean in our society - we have a much deeper societal issue," he says. "It's hard for me to justify what an athlete makes when he plays basketball compared to what a schoolteacher makes or even an engineer...I worry about these a lot but I haven't figured out how to solve it yet, either."

George, incidentally, is a director of one other public company - ExxonMobil - giving him a clean sweep of the two US firms viewed with the greatest suspicion by people on the left.

GOOD EFFORT! I'D GIVE IT :wtf: :wtf: :wtf:

[Demeter]

67. Spanish unemployment at new records: 19.3% and 40% for the young

http://en.mercopress.com/2010/01/06/spanish-unemployment-at-new-records-19.3-and-40-for-the-young

Spanish unemployment rose to the highest in more than a decade in December, 19.3%, capping a year that saw the nation’s jobless rate soar to double the Euro- zone average. The number of people registering for unemployment benefits increased by 54,657, or 1.41 percentage points from November to 3.92 million.

From a year earlier, unemployment climbed by 25%, admitted the Spanish Labour Ministry on Tuesday. The only good piece of news this year was that the number of jobs destroyed in 2009 was 200.000 less than in 2008.

European Union data said Spain’s jobless rate jumped to 19.3% in December and the International Monetary Fund forecasts that it will rise above 20% by the end of 2010. While the Euro-area economy will probably expand in 2010, Spain’s government expects a full-year contraction as the real-estate market works through an excess of at least one million unsold homes and households pay down debt.

Government stimulus measures that helped to create more than 400,000 jobs were due to wind down at the end of last year. A project to spend 8 billion Euros on public infrastructure projects will be replaced this year by a fund half that size.

Employment secretary Maravillas Rojo said that unemployment in 2008 increased “less” than in 2008, which shows that “job destruction continues to mild down”.

Unemployment in Spain compares with a Euro-area average of 9.8% in October, according to the most recent EU data. Youth unemployment in Spain is more than 40%.

The increase in joblessness is eroding support for Prime Minister Jose Luis Rodríguez Zapatero Socialist Party. The opposition People’s Party would win 43.6% of the vote if elections were held now, compared with 38.5% for the Socialists, according to a poll by Sigma Dos published by El Mundo newspaper on January 2.

The Spanish economy officially went into recession in the second quarter of 2008 following years of sustained growth. GDP in the third quarter of 2009 contracted 0.3% and 4% in the first nine months of the year compared to the same period of 2008.

The 16-country Euro-zone was declared officially out of recession in the third quarter of 2009.

[Demeter]

68. Treasurers Embrace Pay-in-Kind Bonds as Ghost of Lehman Fading

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHPJiIEm2a80

Companies are selling debt with terms last seen before credit markets froze, showing why the world’s biggest bond fund manager says another bubble may be brewing.

JohnsonDiversey Holdings Inc., a Sturtevant, Wisconsin, maker of cleaning supplies, and Wind Acquisition Holdings Finance SpA, parent of Italy’s third-largest mobile-phone company, sold bonds that can pay interest in new debt instead of cash, the first such deals since 2007, according to Bloomberg data. Goodman Global Inc. raised $320 million to pay its owner, leveraged buyout firm Hellman & Friedman, a dividend, one of at least seven similar offerings since November...

THIS HAS TO BE WORTH AT LEAST :wtf: :wtf: :wtf: :wtf: :wtf: :wtf: :wtf:

[Po_d Mainiac]

117. I see Wimpy begging for a hamburger..n/t

[Demeter]

124. I'l pay you on Tuesday for a Hamburger Today?

[Po_d Mainiac]

131. Get with the program...Geez

You'll pay me on Tuesday with an IOU dated the 2nd Thursday of the 5th week, February 2014. :hi:

[ozymandius]

139. I'm fresh out of burgers. How 'bout some Xanax?

:hi:

[Demeter]

140. I Just Had a Quart of Chocolate Ice Cream, But Thanks Anyway

[Tansy_Gold]

145. I'm headed for the English Toffee Temptation myself.

Had burgers for supper, but they were paid for.



By




Tansy Gold

[Demeter]

70. Time for Fed to disprove PPT conspiracy theory

http://www.marketwatch.com/story/time-for-fed-to-disprove-ppt-conspiracy-theory-2010-01-05

THIS IS SIMPLY PRECIOUS--BECAUSE AS ANY STUDENT OF LOGIC KNOWS, YOU CAN'T PROVE A NEGATIVE. THIS IS REAGANISM AT ITS FINEST, BEING USED AGAINST THE PUPPETMASTERS WHO PULLED REAGAN'S STRINGS. SAUCE FOR THE GANDER, AND TURNABOUT BEING FAIR PLAY.

[Name removed]

71. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Demeter]

72. TAKING A BREAK

but do go ahead posting your own outrageous finds...I'm down below 90 emails!

[Demeter]

75. Levin apologises for ‘worst deal of century’

http://www.ft.com/cms/s/0/828fd9f2-f96f-11de-8085-00144feab49a.html

By Andrew Edgecliffe-Johnson in New York

Jerry Levin, who sold Time Warner for AOL shares inflated by the dotcom boom, has marked the 10th anniversary of the disastrous $164bn deal with a call for today’s corporate titans to accept responsibility for the recent financial crisis.

The former Time Warner chief executive, who had avoided apologising for the billions of dollars destroyed by the deal, on Monday made a mea culpa in an appearance on CNBC.

“I presided over the worst deal of the century, apparently, and I guess it’s time for those who are involved in companies to stand up and say: you know what, I’m solely responsible for it,” said Mr Levin. “I was in charge. I’m really very sorry about the pain and the suffering and loss that was caused. I take responsibility.”

Mr Levin urged business leaders of the past decade to follow his example. “Where is the stand-up leadership that’s going to take responsibility for what’s happened and do something about it?” he asked.

Citing a New York Times article on Sandy Weill – the former Citigroup boss who said he felt “incredibly sad” about the bank’s decline but pinned much of the blame on his successor – Mr Levin said Citigroup, AIG and General Electric had the same conglomerate problem as Time Warner. “It was not a supermarket, it was a mall,” he said.

He added: “Not only the three companies I just mentioned but let’s hear publicly from Lehman Brothers, Bear Stearns, Merrill Lynch, on and on.”

The aftermath of the financial crisis has seen apologies from bank executives including Lloyd Blankfein of Goldman Sachs . Jeffrey Immelt, GE chief, has said his generation of leaders succumbed to “meanness and greed”, but GE is likely to be infuriated by being bracketed with humbled Wall Street firms.

Mr Levin and his wife run an addiction rehabilitation centre in Santa Monica, California, that describes itself as “a place to revel in the wonder of you”.

He defended the “magnificent concept” behind the AOL deal, but said he did not treat employee fears with enough compassion. “It’s a little hard to exercise compassion, connection and love when the market is very unforgiving,” he said.

Mr Levin seemed to admit that he had waited a long time to demonstrate the contrition he was now asking others to show. “Maybe you could say in my case it’s a little late,” he said.

THAT'S WHAT SPLEEN-VENTING GETS YOU: FULSOME APOLOGIES

[Hugin]

77. ... and all I got was this tee-shirt.

:eyes:


(Also, included in the deal were about 60 million floppy disks and other assorted unsolicited media... :sigh: at least I could re-use the floppies. :think: Oh! I could use the CDs to build a giant reflector to warn off potentially incoming intelligent alien life-forms!)

[AnneD]

103. How did you get....

a shirt and CD floppies...... The rest of us just got a case of Kentucky Jelly. Tastes like shit on my toast.

[Hugin]

113. You mean to tell me you never got one of those AOL disks that were so prolific they could be seen...

from space! :o

Holy Cats!

[Demeter]

76. SS Trust Fund - 2009 Full Year Results - Ugh!

http://brucekrasting.blogspot.com/2010/01/social-security-trust-fund-issued-their.html

The Social Security Trust Fund issued their November and December reports today. They also provided the payment data for January 2010. I think there is some significant information.

From my writings on the Trust Fund I have received many comments from those who believe that the SS is a bankrupt Ponzi scheme. That is not correct. The SSTF did an admirable job in a very tough year. They paid a total of $675 billion in benefits and ended the year with an even $100 billion surplus. On December 31st they were sitting on $2.5 Trillion of US Treasury IOU’s.

That said there are some very disturbing trends at the Fund. First a Macro Economic thought:

There was a onetime negative COLA adjustment that kicked in January 1. Rather than the usual increase, beneficiaries are getting smaller checks. The difference between the December and January payments comes to $475 million. That re-base means a reduced outlay for the full year of $6 billion. In the scheme of things that is peanuts. But this is going to be felt most in the Sunbelt states where the bulk of the beneficiaries reside. I believe that a significant percentage of SS payments goes right into consumption. Given that fixed costs are actually rising for this group of consumers (the hell with COLA) the 65+ set might not be going to the Wal-Mart in Boca as much as they used to. A year ago we were talking of ‘green shoots’. This ‘shoot’ is decidedly brown.


On the Fund itself:

I think that the recession of 08 and 09 and the anticipated high unemployment (low employment) in 2010 has crippled the Fund. Nothing short of a major overhaul can turn it around at this point. The damage has been too great.

In the 2009 Trustee Report to Congress (signed by Chairman Tim Geithner) the following information was provided:

http://1.bp.blogspot.com/_5JJarCb6DPo/S0KhE1oFN8I/AAAAAAAAAsE/ku0r7qAvkaM/s400/outgo-tax+income.png

Now look at the reports released today. Total tax receipts were less than the disbursements. This was not supposed to happen until 2016. It happened last year.






There was a $100 billion surplus for the year. But compare that to the $190 Billion surplus in 2007. We have lost $90 Billion in just two years. But this number should be much higher than the 07 surplus. It was assumed that the Fund would have larger and larger surpluses for years to come. The 2008 Trustee Report (signed by then Chairman Hank Paulson) provided a set of Intermediate Assumptions for the Fund's surpluses looking forward. As you can see we missed the 2009 target of a $220b surplus by a cool $120 billion. As of 12/31/09 the funds assets are behind that 08 schedule by $155 billion.



In prior years the SSTF has financed up to 50% of the deficit through their purchases of Treasury paper. In 2009 that ratio fell to a measly 7% of the total new issuance. It will be a rounding error in a few years. At some point someone is going to look at this and conclude it is not a plus for the bond market.

We are in an election year. Any significant legislation on SS changes will have to be completed by June. After that no one will want to touch this. Given that Health Care is far from resolved and there is that thorny problem with the mortgages Agencies I can easily see that the problems at SS get buried for another year. It will be very difficult to fix this beast if we wait another year.

The most optimistic scenario is that out of the ether comes a bi-partisan effort to address the issue head on and make the necessary fixes. By my calculation that would require a 2% increase in payroll taxes and as much as a 20% reduction in benefits (over time). Taxes on benefits would have to increase as well.

Those combined actions are extremely deflationary. It would directly cut consumer demand. It would be another blow to the head of small businesses. This would not be a brown shoot. Think of this development as being Amber Waves of Grain. And that is the optimistic scenario.

My solution has always been a means test. If you have $100k in taxable income you don’t get paid. Finished. I’m not sure that is legally possible. But to me it is the only option. The alternative will impoverish those that are/will be dependent on SS benefits. Raising taxes on America’s 90 million workers and their employers is just bad economics. It should not be considered.

I am not the only one looking at these numbers. This issue will have to come on the table before June. The 2009 results of the Fund are like an elephant in a room. It's too big to ignore.

[KoKo]

94. Refutes Petersen Foundation..and here's another good comment

from another site trying to counter the lies from the Petersen Foundation which seem to be thrilled over the new SC Regulations because they can use their lying money to fund more disruption by buying Senators and Reps...along with our Major Media to spout their lies.
-----------

BE SURE TO READ REST OF COMMENTS ON "PETERSEN FOUNDATION" Post on "Financial Armageddon" Web Site which posts Petersen Foundations Distortions:

http://www.financialarmageddon.com/2009/12/cause-for-alarm.html?cid=6a00d83451591e69e20128765964fa970c#comment-6a00d83451591e69e20128765964fa970c

"Lies, Lies and more LIES. Transfer payments such as Social Security and Medicare have NO (ZERO) effect on the national debt. However, an increase in transfer payments could expand the economy by shifting money from people with a low marginal propensity to consume (i.e. Peter G Peterson and friends) to people with a high marginal propensity to consume (i.e. working class/taxpaying class/grunts to die in illegal wars class). The ENTIRE PROBLEM is military spending which has a negative growth multiplier effect by removing resources from the economy that could otherwise be used to build productive industries that employ people at good wages that would expand the economy and pay down the debt. Live bankers and dead soldiers pay no taxes.

Put simply: war is a wealth transfer activity that shifts wealth from the working class to the rentier class (people who live off of investments). Transfer payments are a wealth transfer activity that should shift wealth from the rich to the poor but in practice is actually a tax on the working class to self-fund their retirement and medical care. Peterson's agenda is simply to loot Social Security and Medicare to further impoverish the working class.

The proper way to reign in the national debt is to end the wars (just leave) and cut the Pentagon's budget, the CIA's budget, the NSA's budget, etc. and release these resources to be used for productive purposes.

Posted by: Paul Majchrowicz | December 16, 2009 at 01:15 PM

There is no doubt that debt is out of control, but the Peterson-Pew commission's recommendations come from the austerity playbook of global Fascism. The only way to beat the global debt peddlers is to refuse to play by their "rules".

The solution is pure and simple. Drop the globalist, monetarist, fascist, neo-colonial system of monetized derivative swindles, and return to the Constitutionally mandated credit system which has saved America no less than 4 times in its history, every time the Imperial elites have tried to drown us in debt.

Go to letthemfail.us and click TAKE ACTION to see what is beng proposed in Florida, and in other States. Our Governors may be the last hope to restore economic sovereignty among the United States."

[KoKo]

95. Just increasing the SS Deductable to Everyone ...Top 1% to be included would fix SS Shortfall

and be more fair than anything the "Petersen Foundation" is proposing. Right now if you make over $100,000 or so you don't have to pay any SS Tax witholdings from your paycheck after you reach that maximum.

So the bottom half pay all the SS Taxes and the Uppers pay nothing after the first $100,000 they earn.

FAIR?

[ozymandius]

116. Another millstone to hang around Alan Greenspan's neck.

He was the primary proponent of limiting SS contributions to the first $90k of income. His second epic stroke of policy failure was his passionate embrace of Bush's tax cuts. The tax cuts created conditions that prompted the Federal government to consume surplus SS funds while the government ate anything it could find to feed the massive budget deficits.

Heckuva job, incompetent fool.

The solution to this issue, of course, is to raise the cap on SS contributions. I would advocate an unlimited number - rather than the $90k cap that really sticks it to the middle class. What's missing from this equation is the political will. Since most political animals agree that "raising taxes" (even taxes that do not apply to you, personally) plays poorly in the news then I expect that nothing of the sort will get done. That is what i consider a failure of leadership.

[Robbien]

99. A fascinating read: The Minds Behind the Meltdown/swashbuckling mathematicians and computer nerds

At Morgan Stanley's investing powerhouse Process Driven Trading on Monday, Aug. 6, founder Peter Muller was AWOL, visiting a friend near Boston. Mike Reed and Amy Wong manned the helm, PDT veterans from the days when the group was nothing more than a thought experiment, its traders a small band of young math whizzes tinkering with computers like brainy teenagers in a cluttered garage.

On Wall Street, they were all known as "quants," traders and financial engineers who used brain-twisting math and superpowered computers to pluck billions in fleeting dollars out of the market. Instead of looking at individual companies and their performance, management and competitors, they use math formulas to make bets on which stocks were going up or down. By the early 2000s, such tech-savvy investors had come to dominate Wall Street, helped by theoretical breakthroughs in the application of mathematics to financial markets, advances that had earned their discoverers several shelves of Nobel Prizes.

PDT, one of the most secretive quant funds around, was now a global powerhouse, with offices in London and Tokyo and about $6 billion in assets (the amount could change daily depending on how much money Morgan funneled its way). It was a well-oiled machine that did little but print money, day after day.

That week, however, PDT wouldn't print money—it would destroy it like an industrial shredder.

The unusual behavior of stocks that PDT tracked had begun sometime in mid-July and had gotten worse in the first days of August. The previous Friday, about half a dozen of the biggest gainers on the Nasdaq were stocks that PDT had sold short, expecting them to decline, and several of the biggest losers were stocks PDT had bought, expecting them to rise. It was Bizarro World for quants. Up was down, down was up. The models were operating in reverse.

The market moves PDT and other quant funds started to see early that week defied logic. The fine-tuned models, the bell curves and random walks, the calibrated correlations—all the math and science that had propelled the quants to the pinnacle of Wall Street—couldn't capture what was happening.

At the time, few quants realized what was happening, but over the next few days a theory would emerge: The U.S. housing market was unraveling, leading to big losses in the mortgage portfolios of banks and hedge funds. One or more of those hedge funds needed to raise cash quickly to make up for the losses, and needed to sell assets quickly to do so. And the easiest-to-sell assets of all were stocks, those held in portfolios highly similar to quant funds across Wall Street.

The result was a catastrophic domino effect. The rapid selling scrambled the models that quants used to buy and sell stocks, forcing them to unload their own holdings. By early August, the selling had taken on a life of its own, leading to billions in losses. The meltdown also revealed dangerous links in the financial system few had previously realized—that losses in the U.S. housing market could trigger losses in huge stock portfolios that had nothing to do with housing. It was utter chaos driven by pure fear. Nothing like it had ever been seen before. This wasn't supposed to happen!

much much more

http://online.wsj.com/article/SB10001424052748704509704575019032416477138.html?mod=e2tw#articleTabs%3Darticle


A fascinating read. For curiosity sake I went back to see what the SMW thread was talking about over this three day period and found that everyone was noticing something really funny, but not what. But on Tuesday specimenfred1984 called it. He popped in on Tuesday calling the trading "Hedge Funds Gone Wild". Then on Wednesday popped in with a post of "Weeeeeeee, let's go for a ride on the Hedge Fund-o-Coaster! A ticket only costs a minimum of $1,000,000 and you never know where or when it'll stop! "

[AnneD]

101. Honest Injun.......

We grew up in the age of television. Westerns were popular. Unfortunantly, we did not always have a kind image place before us. But when we played cowboys and indians-none of us wanted to be the cowboys. :rofl: Little Sis was always the unwilling cowboy that got hog tied.

We did have our heros. We loved Jay Silver Heels and Chief Dan George. And Will Sampson was a God. So to see who else was an honest Injun-check it out...


http://blogs.amctv.com/movie-blog/2009/11/native-american-actors.php

[Robbien]

102. We may be losing Cuomo and getting a pro corporate in his place

Sizing Up Wall Street Sheriffs
Potential Candidates for New York Attorney General Tread Lightly
http://online.wsj.com/article/SB10001424052748704561004575013503448906246.html

New York's next attorney general won't be elected until November, but some of the likeliest contenders are taking a surprisingly conciliatory tone toward Wall Street, blaming its messes more on a broken system than a culture of greed.

The biggest recipient of campaign dollars in the latest fund-raising period also may come as a surprise: Eric Dinallo, who resigned as New York insurance commissioner last year and now teaches ethics at New York University's business school. Mr. Dinallo, 46 years old, is best known as the former attack dog who recommended to New York Attorney General Eliot Spitzer that he use a decades-old law to crack down on securities fraud at Wall Street firms.

According to state records released last week, Mr. Dinallo raised nearly $1.8 million in the period ended Jan. 11. Hundreds of thousands of dollars came from contributors connected to Wall Street, including hedge-fund manager David Einhorn, J.P. Morgan Chase & Co. Vice Chairman James Lee, former Goldman Sachs Group Inc. Co-President Jon Winkelried, money manager Richard Pzena and U.S. pay czar Kenneth Feinberg, the filings show.

Among other people expected to run for the post now held by Andrew Cuomo, plaintiff's lawyer Sean Coffey got about $1.7 million in contributions, while Nassau County, N.Y., District Attorney Kathleen Rice collected about $1.4 million. Some observers expect it will cost $6 million or $7 million to mount a major campaign.

The race is wide open, with at least a dozen potential candidates, the top three of which are Democrats. The campaign is starting to attract attention on Wall Street, even though primary votes won't be held until Sept. 14—a factor analysts attribute to the job's increasingly strong impact on both the securities industry and state government.

"Wall Street now knows that this matters," says Gerald Benjamin, a professor of political science at the State University of New York's New Paltz campus.

Mr. Cuomo, elected in 2006 and a relentless critic of Wall Street bonuses, has signaled he wants to run for New York governor but hasn't announced plans to run. The attorney general job "is what I'm focused on," he said at a speech Monday.

So far, Wall Street isn't taking much heat from current or potential candidates to succeed Mr. Cuomo.

[AnneD]

105. The most dangerous man in the USA-a home grown terrorist

An amazing person leading an amazing life....Russell Means

http://en.wikipedia.org/wiki/Russell_Means

[Demeter]

106. On Behalf of the Readers, Thank You, AnneD!

Your posts on native Americans has made this theme a success.

My own exposure to this history is limited to the New England and Michigan events of colonial times, and whatever fiction Hollywood dreams up.

Speaking of which, any opinion on films like Grey Owl and Dances With Wolves?

[AnneD]

119. In the words of ....

Rod Redwing "Hollywood doesn't think that Indians are the type, so they always have someone else play the Indian."

I was lucky to see Dances with Wolves with my Mom and Sis. We laughed when discussing the length of it noting it should have been called Dancing with Yellow Socks-but what else does one think 3 women would notice. We gave it 3 thumbs up because they tried to keep it real. Graham Green has more class than most. He is very talented but is pigeon hold by Hollywood-much to everyones loss. It covered many issues accurately. The most interesting one was the history of Stands With A Fist. Many that were abducted even at an older age, were so integrated into the tribe they were with they didn't want to go back. There is actual documentation to back this one up and yet it wasn't until this movie that it was discussed beyond certain kitchen tables. The tribal war scene was accurate and we gave the movie three thumbs up for generally keeping it real. It was after that Mom told us that our great great grand mother was 'married' at 13 to an Anglo hunter. Mom was very young when she met her and she was very old. What she remembers was that she could smell unusual thing-like snakes and told wonderful stories. At that time, you hid your Indian background.

Grey Owl... I love Pierce Brosnan and I saw the movie once but I just couldn't stomach his looks as an Indian. I must have mentally blocked it because I honestly can't remember what I saw.

This theme was good but difficult. My experience as growing up and living in this country is different from one of my friends in the Northwest-she got sent to an Indian Boarding School. I was surrounded by my family-as they have always fought to keep us together, even though there is a Cherokee boarding school.

[Demeter]

123. Regarding Actors in Movies

If you look back, most of the Indians were played by Jews...although in the 30's and 40's most of the actors were escapees from Hitler...probably the noses?

[AnneD]

133. Turn about is fair play.....

Graham Greene's played Shylock in the Merchant of Venice. :spray:

Of all the roles that Hollywood has written portraying Indians, the one that is best and most familiar to me was Marilyn Whirlwind (I hope I remembered the last name right) in the series Northern Exposure. She was my Aunt Bernice reincarnated. I spent the most time with my Aunt Bernice when I was younger. All my aunts said that Bernice was most like my Grandmother (she died shortly after Dad was born). She didn't talk much, but when she opened her mouth-everyone shut theirs. Her words were few but golden. She could go all day and say less than five sentences. She tended her african violets and crocheted.

Marilyn and the tribal character are so familiar to me: Ed the foundling raised by the entire tribe, the spirits and visions that would visit, the sick medicine man, the totem pole that caused a rift in the community, the flute maker trying to keep the skill from dying with him, Columbus Day as a day of mourning. That was the closest at capturing the funny and bittersweet nature of being and Indian today.

We deal with the down side too. Both my brothers have fought addiction problems but have them under control and we are so proud of them. It was especially hardest for my younger brother. We now celebrate the anniversary of his sobriety like another birthday in the family. It is knowing that I could have the same problem that has kept me on my toes.

It was a hard theme but I hope it was interesting.

[Tansy_Gold]

141. "She tended her african violets and crocheted."

that describes my Jewish grandmother, too, except she talked a lot. Never needlessly, however. She taught me to knit and crochet, but I never could grow plants. She was going to bring me African violets when I moved into my first house, but I told her I would only kill it. So she sent me a plastic one instead. That was in 1975; I still have it.


I'm not much on religion or ethnicity or tribalism; I tend to think of us all being human beings and letting it go at that. Even so, there are of course the realities of political economy, geopolitical rivalries, all that good shit, and I don't deny that. But what we've gotten into here with this Great Recession and its associated catastrophes is economic tribalism, us against them -- and yes, I'm guilty of some of that, too -- to the point that sometimes the joking about FRSPs comes close to being almost authentic.

We don't have a species-consciousness, and the more the pukes and their like remain in power (even in the minority they are in power), we will not move any closer. Ultimately, that is the only thing that will save us.

So I am discouraged and disheartened, and angry and frustrated, but I have not reached the point of despair.

At least not yet.

The sun was out today, and the mud dried enough for the dogs to be out two at a time to play and not get their feet dirty. I think I located a long-lost rock hunting place via google earth and I'm eager to drive there and find out for sure. It's only a few miles from the house.. . . .



Tasny Gold, who really doesn't need any more rocks and maybe will take some with her to return to the desert.

[DemReadingDU]

144. She tended her african violets and crocheted.

That was my grandmother, not native Indian, but native Hungarian. She passed these skills to her daughters, who passed them on to us. Not that I have much time (as I choose to read DU), but mom taught us well...sewing, knitting, embroidery, cooking, and saving certain things, just because some day they will be needed.

Thanks for all the history today, AnneD.

[Demeter]

107. Personal Bankruptcy Filings Rising Fast

http://online.wsj.com/article/SB126263231055415303.html

The number of Americans filing for personal bankruptcy rose by nearly a third in 2009, a surge largely driven by foreclosures and job losses.

And more people are filing for Chapter 7 bankruptcy, which liquidates assets to pay off some debts and absolves the filers of others. That is significant because a 2005 overhaul of federal bankruptcy laws aimed to encourage Chapter 13 filings, which force consumers to sign onto debt-repayment plans in exchange for keeping certain assets.

The changes were designed to make it more difficult for people to shed their debt, particularly in a Chapter 7 filling. A "means" test, for example, was introduced to separate those who could afford to repay their debt from those who couldn't. A Chapter 7 filing is off the table if the means test determines a person is able to pay back at least a portion of the debt after it is restructured.

The worst U.S. recession in a generation is testing the effectiveness of these laws. The economic downturn also has prompted more middle-class Americans to file for bankruptcy protection.

Overall, personal bankruptcy filings hit 1.41 million last year, up 32% from 2008, according to the National Bankruptcy Research Center, which compiles and analyzes bankruptcy data. It is the highest level of consumer-bankruptcy fillings since 2005. Consumers rushed to file in 2005 before the new bankruptcy laws took effect in October of that year.

Chapter 7 filings were up more than 42% as of November 2009, compared with the same period a year earlier, according to the research center. November is the most recent month with analyzed data available. Chapter 13 filings rose by 12% and made up less than a third of 2009 filings as of November.

"That suggests it was largely ineffective," Ronald Mann, a law professor at Columbia University, said of the 2005 overhaul. "I don't think anybody who's knowledgeable about the bankruptcy system thought the statute was well crafted."

During this recession, the housing crisis and high unemployment rate have prompted more people to file for bankruptcy who may never have considered the option before, experts said. Filings from 2008 showed more people with high income and high education levels resorting to bankruptcy petitions, according to an annual survey of consumer-bankruptcy filers' demographics by the Institute for Financial Literacy, a nonprofit that provides bankruptcy-related counseling and education services. Those demographic trends appeared to continue last year.

Mr. Mann said he believes bankruptcies reached their peak sometime last year, but bankruptcy attorneys from across the country said there was no sign that business was slowing. The 113,274 filings in December alone were a third higher than the same month a year earlier.

"I can't see over the top of the files on my desk," said Cathleen Moran, a bankruptcy attorney at Moran Law Group in Mountain View, Calif., likening it to the rush of clients before the revised law went into effect. In a three-month period before those rules changed in 2005, her firm filed five times as many cases as usual.

Ms. Moran's clients in 2008 typically were people who earned between $40,000 and $80,000. That changed last year when a rash of people who earned $100,000 to $300,000 began filing as well, she said.

"Expenditures that were rational when these people were working at the peak of their salary just are no longer sustainable when they lose jobs or take jobs at a third or a half of what they were making before," Ms. Moran said.

Craig W. Andresen, a Bloomington, Minn., bankruptcy attorney, handles between 20 and 30 cases a month, but said that in most years that slows to between five and 10 in December, as people use the holidays to divert themselves from their financial problems. This year he had a full load of cases through year's end.

"Everyone has said, 'Wow, I stayed busy all month.' I've never heard in December say that they're busy and don't want to take time away from their office," he said. "People are committed to filing because they don't think their finances are going to turn around."

The glut of homes and falling real-estate prices ultimately sent Kendy and Joyce Parker over the edge and to Mr. Andresen on the last day of 2009. They expect to file for bankruptcy early this year. "One way or the other we're going to have to," Mr. Parker said.

Three years ago the Parkers, who live in Minneapolis and have been married for 29 years, were living well off of Mr. Parker's contracting business. They moved into a new home in 2004 and two years later, when Mr. Parker made roughly $50,000 at his contracting company, they bought an investment property in hopes of renting it out. As the housing economy cratered, Mr. Parker saw his remodeling business shrivel.

He kept the business afloat with a $70,000 line of credit and an additional $70,000 in credit cards. Two years ago, he walked away from the business for a truck-driving job. Despite the steady income from Mr. Parker's job, bankruptcy is the only way to get out of debt. They are debating whether to file a Chapter 7 or 13 petition.

"It's not like I want to rip anybody off. We've made mistakes that didn't work and we're starting over," Mr. Parker said. "You can blame the government or you can blame banks, but...humans take risks and they make mistakes."

[bread_and_roses]

108. In 2008, 30% of US below 200% of Federal Poverty Line

http://www.commondreams.org/view/2010/01/23-7

From 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million. That represented an increase of 15.4 percent in the poor population, which was more than twice the increase in the population as a whole during that period.

The study does not include data from 2009, when so many millions of families were just hammered by the recession. So the reality is worse than the Brookings figures would indicate...

... Democrats in search of clues as to why voters are unhappy may want to take a look at the report. In 2008, a startling 91.6 million people - more than 30 percent of the entire U.S. population - fell below 200 percent of the federal poverty line, which is a meager $21,834 for a family of four.

Really, in the face of such numbers, one has to stand aghast at the feebleness of Obama's and the D's response - if you can even call it that. I wonder, how much longer till this pot boils over? Will people just passively trudge on as more and more spiral ever deeper into poverty?

[Demeter]

111. I've Always Been of the Opinon

that I'm not poor, I just don't have any money to waste.

A lot of people with manners, morals and education fit that description. It is the willfully ignorant, callously immoral, legitimate psychopaths who are really poor, and no amount of money will fix their problems or fill their emptiness.

[ipaint]

152. delete/ wrong thread nt.

[Demeter]

109. Obama Puts Social Security on the Chopping Block — By James Ridgeway

http://motherjones.com/mojo/2010/01/obama-puts-social-security-chopping-block

Hope for lasting liberal change was washed away on Tuesday—not just with the loss of the Democrats' super-majority in the Senate, but with a closed-door deal that would lead to cuts in bedrock liberal programs such as Social Security, Medicare, and Medicaid. While Massachusetts voters were casting their ballots to install Republican Scott Brown in Ted Kennedy’s Senate seat, President Obama was hammering out an agreement with Democratic leaders to support a commission on the deficit with the power to propose reductions to entitlement programs. This proposal represents a capitulation to conservatives in both parties, and leaves liberals surrendering not only on health care, but on the core achievements of the New Deal and the Great Society.

As the Washington Post explains this morning:

Under the agreement, President Obama would issue an executive order to create an 18-member panel that would be granted broad authority to propose changes in the tax code and in the massive federal entitlement programs — including Medicare, Medicaid and Social Security — that threaten to drive the nation’s debt to levels not seen since World War II.

The accord comes a week before Obama is scheduled to deliver his first State of the Union address to a nation increasingly concerned about his stewardship of the economy and the federal budget. After a year in which he advocated spending hundreds of billions of dollars on a huge economic stimulus package and a far-reaching overhaul of the health-care system, Obama has pledged to redouble his effort to rein in record budget deficits even as he has come under withering Republican attack.

The commission would deliver its recommendations after this fall’s congressional elections, postponing potentially painful decisions about the nation’s fiscal future until after Democrats face the voters. But if the commission approves a deficit-reduction plan, Congress would have to act on it quickly under the agreement, forged late Tuesday in a meeting with Vice President Biden, White House budget director Peter R. Orszag, and Democratic lawmakers led by Senate Majority Leader Harry M. Reid (Nev.), House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny H. Hoyer (Md.).

Senate Budget Committee Chairman Kent Conrad (D-N.D.), who has long advocated creation of an independent budget panel, called the agreement an “understanding in concept” that holds the promise of at last addressing the nation’s most wrenching budget problems.

“This goes to the question of the country’s credibility with managing its own finances. This is essential for the nation,” Conrad said.

The commission is likely to form the centerpiece of Democrats’ efforts to reduce projected budget deficits, which have soared into record territory in the aftermath of the worst recession in a generation. Government spending to bail out the troubled financial sector and to stimulate economic activity have combined with sagging tax collections to push last year’s budget deficit to a record $1.4 trillion. The budget gap is projected to be just as large this year and to hover close to $1 trillion a year for much of the next decade.

The deal is based on a rickety interpretation of the country's basic laws governing taxation. Normally, any change in taxes must be passed first by the House, with legislation wending its way through the Ways and Means Committee up to the floor. But the proposed arrangement shortcuts—indeed appears to bypass—this procedure. The appointed commission is to make a recommendation on the budget after the November midterm elections. That recommendation will then go straight to the floor of both houses for an up or down binding vote. There are no congressional hearings and no opportunity for members of the House to weigh in on the proposals. To rub salt in the wound, this plan was largely crafted not by members of the House, but by vice president and former Delaware senator Joe Biden along with two senators: Kent Conrad, the North Dakota Democrat once considered heir to the Great Plains progressive tradition, and Republican Judd Gregg from New Hampshire.

The National Committee to Preserve Social Security and Medicare, which has been fighting the proposed commission, recently sent a letter to Congress disputing the entire premise of efforts to slash Social Security:

We appreciate the concerns of legislators who are looking for a means of reducing the federal deficit and slowing the growth in the debt. However, we have significant concerns about any process—including the Conrad-Gregg Commission—that would disenfranchise American voters and subject Social Security beneficiaries to harmful cuts in benefits. As supporters of Social Security, we are surprised to see the federal deficit and the federal debt cited as the reason a commission needs to be established to make cuts in Social Security. The truth is that neither the $1.4 trillion deficit nor the nearly $12 trillion debt has anything to do with Social Security benefits.

For nearly three decades, Social Security has taken in more revenue each year than it has paid out in benefits. These excess funds have been invested in special issue U.S. government securities. Thus, Social Security has effectively been loaning its excess funds to the federal government to spend on other programs. Rather than increasing the federal deficit, Social Security’s annual surpluses have actually been covering up the true size of the deficit in the general fund.

[Demeter]

112. GOP-linked company tracks online users’ ‘loan-worthiness’

http://rawstory.com/2010/01/banks-tracking-borrowers-facebook-twitter-report/

Want a bank loan? Get yourself more Facebook friends -- but make sure they pay their bills on time.

Banks are beginning to look at user accounts on Facebook, Twitter and other social networking sites to determine if an applicant is loan-worthy, raising privacy concerns as well as questions over whether a person's online friends, likes and dislikes can actually measure their financial stability.

Everything a person does publicly on their social-networking accounts can be found by market researchers if the user's privacy settings allow it. Researchers are now looking at a person's online conversations, the groups they join, products they look at and even who their friends are to determine loan-worthiness.

"The presumption is that if your friends are responsible credit cardholders and pay their bills on time, you could be a good credit customer," reports WTOP News in Washington, DC.

"Lenders say having a wide network of friends can expedite getting a loan, while discrepancies between your loan application and your Facebook wall information can raise red flags. Negative comments about your business also can impact your creditworthiness," WTOP reports...

[Po_d Mainiac]

118. OOPS... u mean all those friends that have been mugged recently

in London, that desperately need money to get their passports back. Those same people whose careless sightseeing at 2am, which caused the pipe upside their head, are going to hurt my "credit rating"????

Nah.....just an excuse for bored bank workers to surf "face book" without the threat of getting fired. :rofl:

[Hugin]

121. That was my take on this article as well... Scare piece.

Fear! Fear! Fear! Ooogie! Ooogie! The boogie-man will getcha!

Think about it... What do the one-percenters fear above all else? People getting together and comparing notes. Collective Consciousness! They HATE anything collective.

Because, one thing leads to another and people figure out how they're being exploited and who's doing the exploitation... and, well, then the mobs form. Next thing the "Masters-of-the-Universe Bankster Superstars" know, they are covered with tar and feathers riding a rail out of town. (Best case scenario)

That said... Micro$oft is a large owner of Facebook. Have I mentioned MS STILL OWES ME a $50 rebate on an X-Box I bought back in October?

[Demeter]

127. No, You Haven't, Hugin

Thanks for sharing!

[Demeter]

114. Unexpected lessons from Massachusetts Why Scott Brown's election may not kill health reform

http://www.marketwatch.com/story/why-health-reform-may-survive-browns-win-2010-01-22?siteid=YAHOOB

After the Massachusetts special election deprived Democrats of the supermajority they needed to pass comprehensive health reform easily, the key question is will the U.S. go the way of California or Massachusetts?

The two states recently pursued similar health-care overhauls with very different outcomes. In March of 2006, Massachusetts Gov. Mitt Romney, a Republican, signed into law a statewide reform that aimed to cover nearly every resident. It had unanimous support from state senators including Scott Brown, whom Massachusetts voters elected this week to fill the U.S. Senate seat held by veteran Sen. Edward Kennedy prior to his death last August.
Brown stalls health-care reform

Despite midnight deadlines and wrangling, the momentum for health care reform has stalled as a result of Scott Brown's election, Doug Luzader reports. Video courtesy of Fox News.

In an apparent contradiction, Brown campaigned on being the 41st vote needed to derail two health-reform bills that lawmakers were in the process of merging into a final bill. The Massachusetts law is widely considered a blueprint for a national version; its centerpiece is a shared-responsibility mandate that requires all individuals to buy coverage, and it provides subsidies for people who can't afford it.

Brown's objection to national reform but support of his own state's reform may have attracted some Massachusetts voters, but the Bay State relies on federal taxpayer dollars to accomplish its overhaul, said Alan Sager, professor of health policy and management at the Boston University School of Public Health

"Maybe some voters felt they didn't want to have to pay for uninsured residents of other states," he said. "That isn't all that fair because a decent share of the money that's financed to improve coverage in Massachusetts came from a Medicaid waiver and accompanying cash from Washington."

John Holahan, director of the Health Policy Center at the Urban Institute in Washington, agreed. "That essentially means people from other states are supporting this Massachusetts reform."

Some voters may have been turned off by the deal-making aspects. But the Massachusetts bill faced similar issues before passing, said Brian Rosman, research director for Health Care for All, an advocacy group in Boston.

"The process here wasn't so pretty either," he said. "There was a stalemate for months."

But after it passed and changes took place, Massachusetts was able to reduce its uninsured rate to 2.8%, the lowest in the nation.

A different story in California

Perhaps heartened by the Bay State's success, California Gov. Arnold Schwarzenegger, a Republican, put health-care reform at the top of his agenda in early 2007. Lawmakers worked with health insurers, hospitals, doctors, consumer groups and others to forge a fragile consensus.

By late September, stakeholders were cautiously optimistic that a deal was just weeks away, even though California had a much higher bar to meet: The Golden State's uninsured rate hovered around 18% compared with the 8% to 10% uninsured rate that inspired action in Massachusetts. Though Schwarzenegger called a special session when lawmakers failed to meet his deadline, the bill ultimately died under the weight of political tensions and budgetary constraints.

In Massachusetts, many of the fears people had about the coverage expansion proved unfounded, Rosman said, noting that employers haven't been dropping coverage despite an employer mandate and insurance quality hasn't degraded.

The biggest criticism has been that the state's reform did nothing to contain costs. While that's true, reducing the cost of care is a much tougher political road to travel because it involves antagonizing interest groups, Sager said.

"It was much easier to agree on improving coverage than on controlling costs," he said, adding that knowledge of how to do it remains elusive as well. "No one really knows how to contain health-care costs."

Unlike Massachusetts, the bills that Congress passed contain some cost-control measures. Nearly four years after passage, Massachusetts continues to tweak its plan, which enjoys high satisfaction.

"The basic structure remains unchanged, but there's constant tinkering and we think that's a model frankly for what Washington will need to do," Rosman said.

In 2010, California remains plagued by a more than 20% uninsured rate and the black eye of legal tussling over a recent spate of rescissions, where some health insurers revoked sick patients' coverage after they submitted claims. California has more uninsured people than Massachusetts has people...

[Hugin]

122. "Massachusetts continues to tweak its plan, which enjoys high satisfaction." (BS Alert.)

I'd like to see the "satisfaction" numbers... They're awfully hard to come by.

"Massachusetts: 26% Consider State’s Health Care Reform a Success" (Monday, June 29, 2009)

Twenty-six percent (26%) of Massachusetts voters say their state’s health care reform effort has been a success. A new Rasmussen Reports telephone survey in the state finds that 37% say the reform effort has been a failure, while another 37% are not sure.

Only 10% of Bay State voters say the quality of health care has gotten better as a result of the reform plan while 29% say it has gotten worse. Most (53%) say the quality of care has not changed.

From... http://www.rasmussenreports.com/public_content/politics/general_state_surveys/massachusetts/massachusetts_26_consider_state_s_health_care_reform_a_success

MarketWatch is as irritating as ever. :eyes:

[Demeter]

126. You Got It

Romneycare is for the birds. Because they can migrate away from it.

[Demeter]

115. We're in the January Thaw Today

39F and raining, rotten snow melting away. Compared to last year, it's been a mild winter. But the economy is still going wild! I will be back later around supper for a final bit of posting of the Global Meltdown.

Thanks for your participation! This thread wouldn't exist without it.

[Demeter]

128. Eye-popping GDP number not sustainable

http://www.marketwatch.com/story/eye-popping-gdp-number-not-sustainable-2010-01-24

U.S. economic growth rocketed ahead in the fourth quarter of 2009 at the fastest pace in six years, propelled by a huge swing in the inventory cycle and still-massive government stimulus, economists say.

However, sources of sustainable growth -- consumer spending, business investment and construction -- are still struggling, they say.

The first estimate of fourth-quarter real gross domestic product on Friday will cap a very busy week for economic news. Also on the schedule: Estimates for home sales, consumer confidence and durable goods orders.

On the policy front, there will also be plenty of news. The Federal Open Market Committee meets, President Obama will give his State of the Union address, the Congressional Budget Office will kick off the debate over fiscal policy, and the Senate may finally get around to approving Ben Bernanke for another term as chairman of the Federal Reserve.
GDP

The GDP numbers are expected to "be an eye-popper," wrote Ed McKelvey, an economist for Goldman Sachs. Economists surveyed by MarketWatch are forecasting a 5.5% annualized increase after a 2.2% gain in the third quarter. It would be the fastest growth since the 6.9% growth rate in the third quarter of 2003. Read our complete economic calendar and consensus forecast USING LINK IN ORIGINAL ARTICLE.

"Although we anticipate a large rise in GDP, underlying growth is expected to be rather tepid, held down by declines in structures, government spending, and motor vehicle sales," wrote Peter D'Antonio, an economist for Citigroup Global Markets.

"It would be premature to break out the champagne on this news," McKelvey said.

Most of the boost in the economy in the fourth quarter came not from sales of goods and services but from the adjustment in the inventories of unsold goods.

After inventories were cut by record amounts earlier in the year, businesses slowed their inventory reductions significantly. In the first quarter of 2009, the decline in inventories was responsible for 2.4 percentage points of the 6.4% decline in GDP. By the third quarter, however, inventories were adding 0.7 percentage points to the 2.2% growth in GDP.

In the fourth quarter, economists expect inventories will be responsible for about 4 percentage points of the 5.5% gain in GDP. In other words, final sales are rising at only a 1.5% annual rate in the quarter.

"Since the boost from inventories is temporary, the GDP data will likely overstate the underlying strength of the recovery," noted economists at Moody's Economy.com.

Inventories are "notoriously difficult to forecast," said economist Meny Grauman of CIBC World Markets. The initial report is based on largely on government estimates and very little on hard data, which only become available in subsequent revisions. The odds are high that fourth-quarter GDP could look a lot different in March than it does now.

Although the GDP numbers for the fourth quarter should look great, the real issue is what happens to final sales in 2010. Few economists expect much acceleration.

"We see little evidence that demand is on the verge of strengthening," Goldman Sachs economists said, pointing to lack of hiring, flagging retail sales and weak demand for housing.

On the other hand, economists for J.P. Morgan Chase are more upbeat. Despite waning support from inventories and from government stimulus, "we expect that real GDP will still expand at a 3.6% rate over the next year," said Abiel Reinhart, an economist for J.P. Morgan.

"Our forecast rests on the observation that profits, labor income, and financial conditions are improving and that the 'growth baton' will be passed from government stimulus to the rest of the economy," Reinhart said.

Housing data

The home sales data for December will be skewed by the expected expiration and then sudden expansion of the home buyer tax credit. The credit for first-time buyers was supposed to expire on Nov. 30, but Congress approved a bill in early November to extend it until the spring buying season and expand it to repeat buyers.
Market Edge: Bernanke and the Future of Fed Policy

With Ben Bernanke facing a rocky reconfirmation, the markets are getting jittery about the outlook for monetary policy. Tony Crescenzi, Pimco's bond-fund manager, assesses next steps for investors in an interview with MarketWatch's Laura Mandaro.

Because sales of new homes and existing homes are reported at different points in the sales process, the two reports could look radically different for December.

For existing homes, sales are reported at the time of closing, which is usually a month or two after a sales contract is signed and several months after the search process began. Buyers expected the tax credit to expire on Nov. 30, which means they would have tried to make a deal by early October in order to close the deal in November.

That means fewer buyers would have closed in December. There was little time for buyers who heard about the expanded tax credit to start looking for a house in time to close in December.

That's why economists in our survey expect existing home sales to plunge by 11% to a seasonally adjusted annual rate of 5.80 million from 6.54 million in December.

Sales of new homes, by contrast, are reported at the time a sales contract is signed. Buyers hearing about the new subsidy would have had time to search for a new home and sign a contract by the end of December.

However, sales of new homes haven't been boosted as much by the taxpayer subsidy as sales of existing homes. For December, sales of new homes are projected to rise about 3% to a seasonally adjusted annual rate of 365,000 from 355,000 in December.

[Demeter]

129. SEC Proposes Very Limited Reintroduction of Uptick Rule on Short Selling

http://www.nakedcapitalism.com/2010/01/sec-proposes-very-limited-reintroduction-of-uptick-rule-on-short-selling.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The uptick rule simply means that a short sale can be executed only when the last sale of a stock is at a higher price than the immediately preceding sale. It was widely believed to do good job of preventing bear raids. It was repealed in July of 2007 and some noted shortly afterwards that volatility increased (but given that the Great Credit Contraction had just begun, it would be hard to reach definitive conclusions).

Now the SEC took a pretty extreme move during the crisis, that of banning short sales of a long list of financial stocks, which did nothing to arrest their decline. Now it is proposing a bizarrely timid re-introduction of the uptick rule, that of having it take effect only when a stock’s price has fallen 10% in a day.

I’m puzzled as to why the SEC is bothering with something this modest (ie certain to be ineffective). If you believe the uptick rule is a good idea, why not just re-introduce it? The only logic I see is this might be that this is an experiment, that having two data samples (how stock trades on a down day when no uptick rule is in effect, vs. when it is). But this seems implausible. First, you’d want to set the threshold higher (maybe 5%) to produce a more robust sample of trades with the uptick rule in effect. Second, regulators don’t tend to think along those lines.

This move instead has the smell of a peculiar political compromise, and Bloomberg says as much:

Concern that short-sellers accelerate stock declines may prompt the Securities and Exchange Commission to adopt a rule next month aimed at curbing bearish bets when equities are plunging.

The regulation would require the trades be executed above the best existing bid in the market when shares fall 10 percent in a day, said Brian Hyndman, the senior vice president in transaction services at Nasdaq OMX Group Inc. In a short sale, an investor borrows an asset and sells it, hoping to profit from a decrease by repurchasing it later at a lower price.

Forcing short sellers to wait for a stock to rise above the best price bid may prevent them from flooding the market with sell orders and causing losses to multiply. Some exchange officials say the restrictions known as uptick rules don’t work, citing studies that show they may be less effective during panics that drive prices down and volatility up.

“There is no empirical data to support the introduction of a new rule,” Hyndman said yesterday at a securities industry conference in Chicago. “But this is the least intrusive of the proposals the SEC was considering.”

Yves here. So here we have a below-the-radar issue, where there is a constituency for Doing Something about short selling, in particular, retail investors and most corporations (mind you, I’m not at all opposed to short selling in the abstract, but bear raids are a real issue, and some constraints aren’t a bad idea). And what do we see? The industry appears to have gone in and done it usual effective job of lobbying. Potemkin reform prevails yet again.

[Demeter]

130. Quelle Surprise! Proposed Restrictions on Proprietary Trading are a Joke

http://www.nakedcapitalism.com/2010/01/quelle-surprise-proposed-restrictions-on-proprietary-trading-are-a-joke.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

True to form, the White House set forth a sketchy program to limit the proprietary trading activities of banks, and it is a vote for the status quo which is being tarted up as something else. I’m amazed that someone of Volcker’s stature is allowing himself to serve as the branding for ideas that are sound on a high-concept level, but are being gutted in implementation.

The press reports have been suitably vague, but two ideas appear to be central, and they were confirmed by a press background briefing that a kind correspondent sent me. They serve to neuter this supposed reform (I am beginning to think we need to ban the use of the word “reform”; Team Obama has absconded with it. For them “reform” = “anything we do here that sounds important enough that a Cabinet member could talk about it for five minutes”. If they keep this up long enough, which they seem determined to do, the term will be utterly useless.)

You can drive a supertanker though the loopholes in this proposal, which are:

1. If a firm does not own a bank, it can do proprietary trading

2. Trades with customers are not proprietary trades

These are so silly that I’m astonished anyone is treating this proposal seriously.

Let’s dispatch them in order.

Whoever thinks that proprietary trading is just swell as long as the firm does not own a bank (meaning the kind that takes deposits) must have slept through the entire credit crisis (note I am not saying prop trading cause the crisis, but I guarantee there will still be reader who demonstrate in comments that reading comprehension is not one of their strong suits).

The implicit idea is that government backstops extend just to deposit-taking firms. That is patently ridiculous and is an attempt to hide from the public the reality of how the financial system works.

Thanks to thirty years of deregulation, a very large portion of credit intermediation (finance speak for the process of providing loans) has shifted from banks to the capital markets. As most readers know, many types of loans are originated by a bank, combined with other loans, turned into bonds, and sold to investors.

For reasons too long to go into now, bonds are traded over the counter (this is not a nefarious plot; there are legitimate reasons why). Over the counter markets have economies of scale, and in particular, network effects. So trading of credit market instruments, over, time, is dominated by a comparatively small number of very large firms.

Credit is critical to the functioning of any economy beyond the barter stage. As economic activity became larger in scope and scale, and banks increasingly became the dominant credit providers, bank panics became a serious threat, and so various safety nets have been deployed under traditional banks, the biggest being deposit insurance and access to the central bank discount window. The quid pro quo was that banks were subject to strict limits on their activities and intrusive supervision. But those were eroded over time while the safety nets, if anything, became more extensive (consider unofficial support activities, such as Greenspan engineering a steep yield curve after the savings and loan crisis).

But now we have a world in which the credit markets are crucial to modern commerce, more so than banks. It would not be all that hard to break up the traditional commercial banking operations of Bank of America up. By contrast, once you get past hiving off non-capital-markets operations like asset management and commodities trading, it would be much more difficult to break up Goldman Sachs. And perhaps more important, absent regulation, it would tend to re-evolve back into its old format. A set of oligopolies, with information synergies among them to boot, is an extremely attractive business proposition.

So any capital markets player of reasonable heft WILL be backstopped. That was the big lesson of the crisis just past and is not lost on the industry incumbents. Does anyone with an operating brain cell believe that if BofA divested Merrill and Merrill hit the wall again that it would be allowed to collapse? Look, we have twice had rescues of major non-banks, first LTCM, then AIG, due to the impact their failures would have ON CAPITAL MARKETS, not on depositors!

But the second one is even more of an insult to the intelligence, that proprietary trades and customer trades exist in neat, tidy boxes and a trade with a customer is therefore a pure act of mere passive order taking. When Goldman went net short subprime, was that not a proprietary position? And who do you think was on the other side of that trade? Hint: for the most part, not other dealers.

Why do you think institutional salesmen entertain clients so lavishly? Read Tetsuya Ishikawa’s How I Caused the Credit Crunch and find out how CDOs were sold.

When a firm has a big position it needs to unload because it see market conditions change and it needs to change course, it will push it out to investors. The idea that putting on and unwinding prop trades takes place only with other dealers (which is what this is effectively saying) is bizarre.

Reader Michael C did an excellent job of dispatching this notion yesterday in comments:

What is Prop Trading?

That’s an easy question to answer.

Any position that ends up in the Var exposure is prop trading.

Var measures exposure to market risk. Var is the measure of market risk used to determine the amount of capital required to support the trading activities at banks under the BIS capital framework. There is no uncertainty about what constitutes trading risk (prop trading) . Indeed, the market risk capital requirements were designed to enable the prop desks at banks the flexibility to manage the market risks of their prop activities free of regulatory interference regarding the component pieces, provided they held capital against the books.

Market Risk exposure (which includes credit risk translated into market risk through capital market and derivative activities (i.e CDO and CDS)) arises through the trading activities of the institution.

The “who can tell what’s customer driven and what’s prop trading “ argument is completely bogus. If the activity leaves the institution with net market risk exposure, that activity is prop trading. I believe this is Volcker’s view.

To determine what is appropriate prop trading for an institution, review the Var exposure by trading desk at each institution, then determine which prop trading desk rightfully belongs in a federally backstopped institution. To be precise, review the positions feeding the Var. The risk calculation methodology issues are irrelevant for this argument.

For example, if the structured products desk at GS generates market risk and thus Var, and if it’s a major profit center, GS needs to convince us that this is an activity that should be supported by any type of govt support…

GS’s defense that the prop trading represents a sizeable but small % of their revenues is nonsense. They may make the lions share of their trading profits on transaction spreads, but the additional % they designate as prop trading on the residual exposure is a piece of the whole trading activity that is considered as “prop’ trading under the global banking standards.

I’m exasperated by the press coverage, especially in the NYT and WaPo which seems to be perpetuating the myth that the bankers are just too clever and any attempt to regulate is guaranteed to be gutted and dead on arrival.

Bullshit. Your recent reporting is a clear sign that that mythology has lost its power to mesmerize.

So let us be clear: the “bankers are too clever” meme is a very convenient cover for the fact that the government is in bed with the plutocrats.

Clusterstock tells us how little impact the prop trading proposal will have (and it ran the very day the new proposals were announced):

Big banks have already begun poking the holes in Obama’s new rules—holes they expect their banks to pass through basically unchanged.

The president promised this morning to work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.

But sources at three banks tell us that they are already finding ways to own, investment in and sponsor hedge funds and private equity funds. Even prop trading seems safe.

A person familiar with the operations of one big Wall Street bank said it expects that new regulation will affect less than 1% of its overall business.

And that’s before Congress waters the legislation down further. So much for change you can believe in….

[AnneD]

134. As with all sweat lodges....

or vision quests, once the toxins such as hate, jealousy, rage, and envy are removed, one prays for healing, guidance and wisdom.

So I would like to offer..."Sun Journey" is from the film "The Blood Cries Out" which was nominated Best Long Form Music Video in the 2007 Native American Music Awards.

www.youtube.com/watch?v=k6A0LeRKkH4

And this is a Blues Indian flute.

www.youtube.com/watch?v=cqtjpCGhCQk&NR=1

And this of course is my favorite. The video is a college of the various tribes of the USA, not just Cherokee...

The Cherokee Morning Song...

/www.youtube.com/watch?v=1VqoxOcEqpk&feature=related

Ignore the video (it is one long cliche) on this but this is an example of a familiar song sung in Cherokee. I cannot listen to this and not help but remember childhood Sundays spent with my Aunts, Uncles, and cousins. In my mind's eye I can still see the elegant script and smell the musty smell of the hymnal....

www.youtube.com/watch?v=UvYIjFtPQEk&feature=related

Have a good week ,

AnneD

[Demeter]

135. That's a Wrap, Folks

Thanks for joining in our little "teach-in".

I took the Kid to see the new Sherlock Holmes movie. Although it is a well-crafted and entertaining, if extremely violent and degrading film, it ISN'T by any definition Sherlock Holmes, whose stories I did endeavor to read in their entirety in junior high.

I just want to slap some people upside the head and ask them if nothing is sacred.

[AnneD]

137. A copy of Sherlock Holmes helped me keep my sanity....

When I traveled through India to see the other Indians....
Does anyone else but me think it is some kind of cosmic joke that my husband is from India. He keeps asking me if he can get a tribal roll card since he is 100% Indian and I am only 1/2.:spray:

[Dr.Phool]

138. Kick!

So I can read all night.

It's been a long day. Week.